G I WELTWIRTSCHAFT I GLOBAL ECONOMY TOPICS

There is one more reason for central bankers to get a move on. Interest-rate changes affect the economy with a substantial delay. It takes time for higher rates to alter investment and spending decisions, and subsequently to produce lower demand. The full brunt of changes in rates usually takes a year or more to be felt, which means that many of the ecb’s rate rises are still to feed through. Policymakers have probably tightened too much.

The ECB was too slow to react to rising inflation. Now it runs the risk of being too slow on the way down as well. ■

The second reason for concern is the health of the overall economy.

It has struggled with weak international demand, including from China, and high energy prices.

The ecb was too slow to react to rising inflation. Now it runs the risk of being too slow on the way down as well. ■