Once, central bankers knew what they needed to do to handle inflation. As they grapple with the economic consequences of the coronavirus pandemic, the consensus on how best to foster low and stable price growth has broken down.

After years of setting interest rates on the basis of inflation forecasts and seeking to hit a target of about 2 per cent, the leading monetary authorities around the world are pursuing different strategies.

The OECD warned this week that “vigilance is needed”, but any attempt to raise interest rates should be “state-dependent and guided by sustained improvements in labour markets, signs of durable inflation pressures and changes in the fiscal policy stance” — so vague that every major central bank can say its policy meets the criteria.