In mid-2008 the ECB hiked rates in advance of a rapidly building financial tsunami as energy prices surged to record highs. It looks as though they are setting the stage to do it again.
I guess they ignore the fact that rising energy prices act as a an extremely regressive tax (one that hits the poorest hardest) on every stage of economic production is lost on those fine fellows in Frankfurt…
Better to look tough than to act logically and let the energy spike run its course….
Higher rates will only compound the Irish, Portuguese and Greek problems Europe is still struggling to contain…