Dr. Kieran McQuinn:

To be fair to the European institutions, there have been lessons learned from the way in which the financial crisis was dealt with. The ECB increased policy rates in 2008 and 2012, and there is a general acknowledgement that this was a mistake and that it cut off the potential recovery of some of the economies in the euro area during the financial crisis. There is a lot of institutional memory there, as it were, in terms of the impact that those rather hasty increases in policy rates had, so I believe that is still influencing decision-making in the ECB at this juncture. However, clearly, if inflation really takes off and is very persistent, it is going to have to act.