European Central Bank chief Jean-Claude Trichet says the worst of the credit crisis may still be ahead.
In an interview with BBC Radio 4, Trichet says the globe is experiencing "an ongoing, very significant market correction".
Trichet warned serious problems could follow should central banks continue to cut interest rates now, comparing the recent hikes in energy and food prices to the 1970s oil crisis.
The ECB has not followed the Federal Reserve and Bank of England in making swift interest rate cuts in the face of slowing growth, a major reason for the current record strength of the euro currency.
Trichet’s comments mean the ECB is unlikely to cut interest rates in the short term.
While the Consumer Prices Index (CPI) has climbed significantly in recent months, Trichet says high inflation "will not last forever”.IFAonline
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