Preheat the oven to 90°C. Trim fat from the lamb and season with salt.
For the lamb, heat 1 tbsp oil in a frying pan on a medium-high heat. Gently fry the racks until golden brown all over.
Remove from pan and place on a bed of thyme along with the unpeeled garlic cloves in a baking tray. Put in oven for one hour, or until a meat thermometer registers an internal temperature of 55°C.
Remove from over and allow to rest somewhere warm for 10 minutes. Check garlic and, if needed, return to the oven and continue to cook until very soft.
For the peperonata, heat 2½ tbsp oil in a large, heavy-based pan over a low flame. Add onion, garlic and oregano, and sauté for 10 minutes, stirring often, until onion is soft.
Add capers and anchovy fillets and stir over heat for 2 minutes. Add capsicums and cherry tomatoes and simmer, covered, for 20 minutes, until capsicum strips are soft and tender. Add olives, vinegar and sugar and simmer, uncovered, for 10 minutes, until slightly thickened.
Cut each rack into portions and serve with a large spoonful of the peperonata and slow-cooked garlic.