Preheat the oven to 170 degrees C. Slice off the top third of the head of garlic so the tips of the cloves are exposed. Place in a small baking dish, and add just enough water to cover the bottom of the dish. Drizzle the olive oil over the top of the garlic, then cover with a lid or foil. Bake for 45 minutes.
Melt butter in a saucepan over medium heat. Mix together the flour and milk so there are no lumps, and pour into the pan with the butter. Bring to a boil and cook, stirring constantly until thickened, about 5 minutes. Squeeze the garlic cloves from their skin and mash. Stir garlic into the sauce, and season with salt, peppercorns and nutmeg.