It is within this highly uncertain environment that central banks need to manoeuvre and find ways to best deal with rising inflationary risks without jeopardising the recovery and creating threats to financial stability. 2. An uncertain and volatile global landscape  The sovereign debt crisis in peripheral Europe shows little signs of abating.
Speculation around a possible Greek debt restructuring or, in some quarters even around an eventual exit from the euro zone is gathering momentum and threatens the outlook for Ireland and Portugal, and could possibly cause disruptions in Spain and core Europe. We have recently seen further rating downgrades and revisions to rating outlooks by rating agencies.