The word “stagflation” was first coined by Ian Macleod in 1965, when he was shadow chancellor. But it took off on 7 July 1970 as part of a chastening description of the public finances he delivered as chancellor, a neologism for a Britain embarking on its darkest decade. Since then it has been a useful byword for an overheating and yet static economy – including our own. “NEW ERA OF STAGFLATION” splashed the Daily Mail on Friday (7 February), reporting the simultaneous forecast of an economic growth cut for the year to 0.75 per cent and a rise in inflation to 3.7 per cent. Not for the first time in British history, visions of the Seventies have returned.
Of course, the decade was always more of a half-remembered nightmare than a chronological construction. Accounts differ as to when “the Seventies” began. Conventional wisdom has it that the 1960s only ended when the Yom Kippur War in October 1973 prompted an immediate four-fold increase in the cost of crude oil. At a global level that was certainly the case. Things were never as good again.
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