Outlook: Paralysis Sets in at the European Central Bank of Inaction

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THE EUROPEAN Central Bank must be pretty confident it made the right call by leaving interest rates unchanged yesterday. In doing so, it shrugged off the advice of the International Monetary Fund, Germany's leading economic institutes, the Organisation for Economic Co-operation and Development, Uncle Tom Cobbleigh and all.

Does Wim Duisenberg, the ECB president, know something the rest of us don't? The markets took one look at his announcement yesterday and decided he did not, sending the euro even lower because of disappointment that the ECB had not seen any need to do its bit to boost European growth prospects.

Mr Duisenberg's rationale for the inaction hinged …