Central banks will have to continue juggling the incompatible objectives of taming inflation while also keeping long-term rates (or intra-eurozone spreads) low through balance-sheet maintenance policies. And all the while, governments will continue to fuel inflationary pressures with fiscal stimulus and persistent sanctions.

Over time, tighter monetary policies may cause a growth slowdown or outright recession. But another risk is that monetary policy will be constrained by the threat of a debt trap. With private and public debt levels at historic highs as a share of GDP, central bankers can take policy normalization only so far before risking a financial crash in debt and equity markets.

At that point, governments, under pressure from disgruntled citizens, may be tempted to come to the rescue with price and wage caps and administrative controls to tame inflation. These measures have proved unsuccessful in the past (causing, for example, rationing) – not least in the stagflationary 1970s – and there is no reason to think that this time would be different. If anything, some governments would make matters even worse by, say, re-introducing automatic indexation mechanisms for salaries and pensions.