Prophet with honour
THE man who first warned us of inflation's return has come back to the City. This is Tim Congdon, for long the economic sage of brokers Messel. Nigel Lawson says (and was saying again this week) that the pressure got into the inflationary bubble when he and other countries' finance ministers cut their interest rates after the crash of October 1987. Mr Congdon dates it from two years further back, when Mr Lawson abandoned the monetary targets based on M3, the broad measure of the money supply. Then and thereafter, Mr Congdon argued that the renewed growth of money and credit — most of all, the surge in mortgage lending — was storing up inflation and would end in tears. When he left the City last year (he had not much enjoyed life with Messel's new owners, Shearson Lehman) he found himself label- led the last of the monetarists. There are more of them now. Mr Congdon is joining Gerrard & National, the biggest money- market house, as economic adviser, and is setting up his own research company with Gerrard's support. Welcome back, Tim.