Inflation and interest rates.

[red750]

I know noting of economics, so this will no doubt highlight my ignorance, but can someone explain how, when inflation is increased by outside forces, such as the middle east crisis and the increased cost of fuel, that punishing the victims by increasing the interest rates is going to solve the problem? Surely this will only push prices, thus inflation, higher.

[facthunter]

I agree. You  raise a very Pertinent Point. Interest rates are a very blunt instrument.. Nev.