The message here is that excessive dependence on monetary policy to deal with inflation carries real risks and that the only way of reducing inflation, without severe consequences for interest rates is by having a better balance between fiscal and monetary policy i.e. sharing the burden between the government and the private sector. What are the short term prospects?
To say the least the current international crisis and in particular, the steady decline in energy prices, are giving rise to much uncertainty in our domestic economy. This nervousness is being reflected in several ways: •  An incipient recovery in the stock market has petered out and as in the US, investors are now playing safe.