The fragility of depoliticization: revisiting the history of Central bank inflation-management

In recent years, it has sometimes seemed like the fate of economic depoliticization is up for grabs: the 2008 global financial crisis raised serious questions about the economic viability of technocratic economic strategies while the rise of populist parties has challenged their political sustainability. Even central banks, once the priests of economic depoliticization, began to waver by the early 2020s, paying some attention to inequality and climate change. Yet, as inflation picked up after 2022, central banks returned to their old depoliticizing strategies, reimposing strict inflation targets. As we watch central bankers outdo each other as monetary hawks, we may be tempted to see the return to depoliticization as natural and inevitable. This paper paints a different picture, showing that policies aimed at depoliticizing monetary policy have encountered as many failures as successes since the early 1980s. Drawing on recently declassified archival material, it examines three attempts to put depoliticized monetary policy into practice in the UK, seeking to understand why depoliticization failed so many times and then succeeded. If attempts to depoliticize monetary policy have had a rockier history than is generally assumed, the era of successful monetary depoliticization was not only surprisingly brief but may well be over.