Why do governments think they can control inflation?

Now that the UK has tentatively but officially crawled out of recession, thoughts turn to when interest rates will rise across the developed world.  Conventional wisdom states that sooner or later, excess capacity in an economy gets taken up as growth returns and eventually that leads to inflationary pressure.

The only problem is, I don’t agree with this analysis.  I’ve already said before and I will say again, inflation can no longer be controlled by governments.  Commodity prices worldwide are driven by global demand and with competition rife and supply chains tightly managed, products in store are a function of the raw material costs.  Similarly, if products in manufactured in a high growth economy like China where excess capacity has already been taken up, inflationary pressure there causes product prices to rise elsewhere.  And with our current erratic weather conditions, even food prices are affected by things beyond our control.

So I can’t help but laugh out loud when I see central bankers in the west increase interest rates to try to control inflation.  Like the banking industry, they can only be controlled by concerted global effort.  So inflation also needs coordinated global effort.