Against All Advice

Well, despite the fact that the eurozone finance ministers aren’t on board, and that the OECD doesn’t approve, Trichet and company will undoubtedly go ahead tomorrow with the first refi rate rise in 5 years. (I think important issues are involved here, so I’ll try and write something more substantial for Afoe tomorrow, when the decision is announced.):

Europe’s finance ministers on Tuesday delivered a last-ditch plea to the European Central Bank not to raise interest rates, amid fresh international criticism of the bank’s hawkish stance.

Jean-Claude Juncker, Luxembourg’s prime minister, claimed inflation was under control and warned the bank that a rate rise could hit growth in the 12-country eurozone. Simultaneously, the Organisation for Economic Co-operation and Development said it believed a rate rise was premature.

Incidentally, the IMF, in the person of Rodrigo Rato, is also contrarian, so this is very much ‘go it alone’ stuff from Frankfurt: ‘into the valley of death, rode the 600’.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".