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’.