A villain lurks in the shadows. Politicians hoped they had banished it to economics textbooks about the 1970s. Queues at the pump and the job centre, eye-watering prices and mothballed factories. Stagflation is back.

A word for a mix of rising prices (inflation) and slow economic growth (stagnation). As UK inflation hits a 40-year high, the World BankA financial institution that provides loans and grants to developing countries in an effort to reduce poverty.  warns: "The danger of stagflation is considerable."

The weapons against inflation - higher taxes and interest ratesThe interest rate tells you how high the cost of borrowing is, or how high the reward for saving is. If it is more expensive for businesses and consumers to borrow, they will spend less and inflation will fall.  - hurt growth. But getting the economy moving with tax cuts may drive prices higher. On Friday, the European Central Bank raised interest rates for the first time in 11 years.

The last time stagflation hit, spikes in oil prices sent inflation soaring as the global economy stalled. Now, experts blame the pandemic for disrupting supply chainsThe system of connected suppliers and producers that bring a product to consumers. One product might come to us through several sites across the world. Covid-19 infections and restrictions disrupted these chains. and the war in Ukraine for raising the cost of oil, gas and food.

The 1970s crisis ended with mass unemployment and the worst recession since World War Two. Are we heading for disaster?

"In human terms," says economist Kristalina Georgieva, "people's incomes are down and hardship is up". Inflation means wages and savings are worth less. The biggest increases are for food and energy, affecting poorer households the most.

"It's ultimately the worst of all worlds," says economist Andrew Hunter. Economists fear a labour shortage will push up wages, causing inflation to spiral out of control.

Others insist we are not going back. "If you dig below the surface", says Andrew Goodwin, "we think the current situation is very different". We have a weaker labour movement, independent central banksA central bank manages its country's currency and usually handles its monetary policy. and more efficient economies.

In the 1970s, the solution to stagflation was to reduce the size of government and make it easier for businesses. We are at another "tipping point", argues economics writer Hermione Taylor.

For example, environmentalist George Monbiot says the climate crisis means we must "dramatically reduce economic activity". Economist Kate Raworth believes we must design sustainable economies.

Others argue we need stronger safety nets. One radical idea is universal basic income.

In the UK, the two politicians competing for Boris Johnson's job have very different answers to the economic crisis.

The future may depend on what politicians do next.

Yes: Economics is not working. After the pandemic, millions left their jobs to seek a better balance between life and work. Now, we need to design a new economy that serves people and the environment.

No: Stagflation is never good news. Inflation is a silent killer that destroys lives. Stagnation limits what politicians can do to help. And it could take years to recover from a major economic downturn.

Or... Whatever happens, we must not be afraid. At the height of the Great DepressionA severe worldwide economic depression that started in the US in 1929. When Roosevelt was elected, the US unemployment rate stood at over 20%. in the 1930s, US President Franklin D Roosevelt addressed Americans: "The only thing we have to fear is fear itself."