Governments struggled to survive in a decade in which the populace went to the polls no fewer than four times, in the last of which a lame duck Labour prime minister had taken over part-way through a parliament and then lost a vote of confidence ­ and then the general election. Industrial action ­ the oxymoron that defined ‘the British disease’ ­ was truly crippling, destroying the car industry and bringing the country almost to its knees as London’s Leicester Square filled up with uncollected rubbish ­ and rats ­ while the army put out fires. You can add to this list of disasters flared trousers.

And then there was inflation. Right, proper inflation we had back then, double-digit stuff that, thanks in part to a particularly hopeless Conservative government that ducked the problem by fuelling it, zoomed right on upwards towards 28%, if memory serves. Interest rates went all to hell of course, too. Base rates in the high-teens by the end of the decade, with only a toe-hold on single digits throughout the ensuing 80s.

So as we sit here watching inflation “soar” to a dizzy 4-point-something percent (or is it 3-point-something? We only had one inflation index to contend with in the 70s), it’s easy to think that this is much ado about not very much. If that’s your view then read Phil Thornton’s article on page 15 about the looming battle between the Bank of England, which wants to go hawkish on inflation, and the Treasury, which would prefer it if the Bank could also bear in mind its obligations to support the government’s objectives for growth and employment.

The Bank must not lose its nerve, nor undermine the fragile confidence in the market that it will do the job that needs to be done. ‘A little inflation’ is like being ‘a little pregnant’. It is a tax on the poor and a corrosive substance that eats away at industrial investment. See how long gilt yields are already edging up as inflation expectations start to ooze into the financial markets. Governor Mervyn King is talking tough, but it isn’t solely his decision. May he embolden the monetary policy committee to prevent rising commodity costs from feeding through the whole supply chain and into wage packets.

It makes me wonder, though: what do they teach Treasury economists these days? Do they still think you can have inflation or unemployment? Does the concept of stagflation not feature yet on a training programme still stuck in a pre-war Keynesian time warp? Or is there simply no one old enough to remember what it was like? Either way, the Treasury must yield to the Bank on this one. Stagflation is a phenomenon (and a word) as ugly as a pair of flares.