Yesterday at the press conference at the Bank of England to present its latest quarterly inflation report governor Mervyn King was asked the killer question, "If you had known how much higher than expected inflation was to be, would your policy have been any different?"
To which the governor replied, "No, probably not." (Link)
So there you have it. They are not really trying to control inflation at all. They are actually trying to inflate away debt without us noticing. Fine if you're a profligate borrower mortgaged to the eye balls; legalised theft if you're a saver or someone living on a fixed income.
Merv regards our currently inflation as a series of external shocks which he cannot control. He seems to distinguish between imported inflation such as oil prices which he shouldn't try to control and domestic wage inflation which he should.
So, prices can go up and he won't try to stop them, but if our wages go up to compensate he'll crack down on that. Nice!
Of course most of our wages won't go up. Prices will go up as the imported raw ingredients cost more, taxes will go up, not least to pay the government's index-linked pension liabilities, some domestic-only service costs will go up, eg parking charges, stuff you can't import, but most of us productive people make goods or offer services which are priced globally. We can't put our prices up if the Germans don't put their prices up.
Merv could fight all inflation. If he put interest rates up sterling would go up and oil prices (dollar-denominated remember) would fall, as would the raw material costs of things we make. But he has abdicated his responsibilities and won't do that.