Within minutes of last week’s rate cut by the Federal Reserve , market analysts predicted that the European Central Bank would have to do the same. When the US sneezes – you know the rest.

It is not going to happen. The ECB may cut interest rates at some point, though I would not bet any hard currency on this. One of the most important reasons historically for monetary union in Europe was to become less dependent on the US. Today, monetary policy in Europe is geared towards domestic targets. If the ECB cuts, it will happen because of firm evidence of a fall in domestic inflationary pressures.