It fuelled a run up in asset prices that was always going to feed through to higher prices in the shops one day.
And it relied too much on failed models that predicted inflation was merely transitory, when in fact it would prove exceedingly hard to shift.
In reality, just because a central bank is independent that should not mean it is immune from criticism.
In Australia, the Reserve Bank has launched a review of its operations to try and work out where it went wrong, and how it might learn from the mistakes of the last few years.
The report has resulted in what the Financial Times described as “the biggest shake-up of the country’s central bank in its 63-year history”.
What have we heard from the Bank of England?
There has been plenty about how the war in Ukraine is to blame, or greedy companies, or lazy workers. Andrew Bailey, the Governor, has admitted that there are “very big lessons to learn”. But so far there has not been a single moment of serious public self-reflection.
That is simply not good enough.
It is surely clear that the Bank of England requires wholescale reform.
That should start, as a bare minimum, with a new Governor, a new chief economist, and a revamped Monetary Policy Committee, this time made up of genuinely independent voices, preferably from industry as well as academia, to challenge and shape its decisions.
And there should be a Commission of Inquiry with far-reaching powers to examine both the inflation catastrophe of the last year, and more widely, whether the independence it was granted by Gordon Brown in 1997 has really worked.
Nothing less will do. And until that process starts we will remain the sick man of Europe – and it will be an unreformed Bank of England that will be to blame.
