Savage cuts
I HAVE a tip for the Monetary Policy Committee: the chap with the right idea about inflation was King Henry I. In his reign the price of corn rose sharply because, as the Anglo-Saxon Chronicle records, the coinage was so debased that if anyone took a pound to market, he found it imposssible to buy a pennyworth: 'Henry sent from Normandy to England and gave instructions that all the moneyers should be deprived of their members.' The Bishop of Salisbury saw this edict carried out, to such effect that for 250 years from 1270, which is as far back as the Bank of England's calcu- lations go, the Retail Prices Index was unchanged. (The blip at the time of the Black Death corrected itself.) Later, the mistake was to apply King Henry's treat- ment to the Bank itself. It is hard to reverse, though the Committee must try.
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