Britain's money supply experiment, 1971-73

This article challenges the claim that monetary policy neglect was responsible for the unprecedented UK inflation of the 1970s. It departs from the historiography by showing the Bank of England following money supply objectives from 1971, two years earlier than is currently acknowledged and five years before Denis Healey first published a money supply target. After missing its monetary objectives in 1972-73, the Bank concluded that tight control of the money supply was impracticable in the UK. Conservative policymakers drew the opposite conclusion, that only tighter control of the money supply would cure Britain of its economic ills. This failure to heed the lessons of 1970s monetary policy would have profound consequences for the British economy in the early 1980s and beyond.