It is easy to take low inflation for granted - and I suppose that is a measure of the success of the Bank of England in managing interest rates.

I have various issues with the Bank - for example, I think they tend to favour London and the South-east over the rest of the country and give much more importance to the housing market than to manufacturing.

They would take issue with that assessment, but it doesn't mean it's wrong.

Nevertheless it would be churlish to deny that the Labour Government's decision in 1997 when it first came to power to allow the Bank independence to set interest rates has been a great success. A generation is beginning to grow up who don't know any different.

And for those of us who do remember what went before - it is easy to forget.

So when Bank Governor Mervyn King came to Birmingham last week and addressed the Lunar Society we got a bit of a journey down memory lane.

No bad thing occasionally. Our exit from the ERM - the long disgraced European Exchange Rate Mechanism, a kind of pegging of currencies, which was eventually supposed to run seamlessly into the introduction of the euro - is etched deep into my soul.

The speculators had a field day and proved more powerful than both the Tory Government of the day and the Bank of England. For a few hours interest rates hit 15 per cent in a failed last ditch stand to protect the pound.

I don't know how many people at that point were staring at either bankruptcy, impoverishment or, at the very least, a severe struggle to meet financial commitments, but it was a lot, including me.

However I had largely forgotten that throughout the 1970s inflation had averaged 13 per cent, peaking at 27 per cent in 1975. As Mr King pointed out, even in the 1980s it averaged more than seven per cent a year.

The reason for it all? That can mostly be laid at the door of the massive financial debts we were left with at the end of the Second World War.

And it did help get those debts down. Indeed, inflation helped me too - the first 25-year endowment policy on my house came in massively ahead last year.

Why? Because it had begun in the high inflation years when returns were greater and the value of what I had borrowed was diminishing.

Yet inflation at those sort of levels was both unsustainable and an utter nonsense.

I had also forgotten how interest rates would change not just twice a year or so - the present norm - but sometimes twice a week.

Mr King insists the Bank was not forewarned that Labour would give it independence on interest rates, nor did they expect it.

And I did not know, either, that it was Alan Greenspan, chairman of the US Federal Reserve, who persuaded Chancellor Gordon Brown to give the Bank that independence. The current system is not perfect, it may be possible to fine tune it yet a touch, but I would agree with Mr King that it works "reasonably well".

And probably better than anything which might replace it. Better the devil you know.