Prices are now rising faster than they have in over 40 years in the US, the UK and the rest of Europe. Yet central banks failed to see this coming and are still underestimating the real causes of inflation and how long it’s likely to last. The mainstream view is blaming a temporary rise in energy prices and the stimulus packages governments offered to shield the economy from the effects of Covid. But the real explanation of why inflation is as high as it is is very different: changes in demography. The last few years have seen an end to the abundant supply of cheap labour globally, an effect accelerated by the pandemic. But trying to aggressively contain the resulting inflation now could backfire, writes Charles Goodhart.