CAMBRIDGE: Caught by rising inflation from oil prices and a soaring dollar, the European Central Bank (ECB) has raised interest rates yet another notch. More is to come. Growth is wonderful; inflation is terrible; a central bank cannot avoid choosing: it must restore price stability even if that means sacrificing growth. This is what lies ahead, unless there is sudden relief from an upturn in the euro. But is it realistic to expect a rally from a currency that has been under siege since its birth?
CAMBRIDGE: Caught by rising inflation from oil prices and a soaring dollar, the European Central Bank (ECB) has raised interest rates yet another notch. More is to come. Growth is wonderful; inflation is terrible; a central bank cannot avoid choosing: it must restore price stability even if that means sacrificing growth. This is what lies ahead, unless there is sudden relief from an upturn in the euro. But is it realistic to expect a rally from a currency that has been under siege since its birth?