Inflation in South Korea has had its biggest rise in 10 years as the country battles rapidly rising oil prices. That’s well above a forecast 4.8% annual rate from the country’s central bank, issued a few hours before the official government figure was released yesterday. The inflation figure is well above those in Europe (4% in the euro zone according to an early estimate released Monday night), the 4.2% rate in Australia and the US and the accelerating 4% plus rate in New Zealand. The South Korean official statistics office said the June consumer price index climbed 5.5% from June 2007, accelerating from May’s 4.9% figure. The figure was a touch above the estimates of economists surveyed by Bloomberg and Reuters. Prices in June jumped 0.6% from May. The central bank had earlier forecast that inflation this calendar year would quicken to a decade high as fuel and food costs surge. Like ...

I happen to spend my summers in Norway. I was quite amazed at the amount of negative response received from European posters on the ECB post. I still believe the ECB is making a mistake. Granted, the ECB is dealing with a host of issues the FED does not have, such as, semi-rigid labor markets. I still believe the ECB’s target and potential slavish adherence with keeping to an inflation target will cause a lot of unnecessary pain to the Euro zone. Yes, I am in the “this inflation is transitory” camp. However, the last few days have seen an orchestrated move in several central bank policies. Most notably, the ECB is telegraphing the potential to raise its rates. The Bank of Canada did not cut rates. India has raised rates. China is making moves to drain liquidity from its system. ...