T he 25 basis-point rise in interest rates that the European Central Bank is expected to announce today is nothing more than a token move. It will do little to calm expectations of yet more inflation over the summer. It will also have little impact on the economic outlook, whether in terms of growth or inflation. Interbank rates are already near 5 per cent and may not rise much even after the ECB's move.

Jean-Claude Trichet, ECB president, has described inflation pressures as "humped", meaning that they will strengthen on the back of commodities but fall back once the external price shock passes. That hump is becoming ever larger and more protracted, as commodity price pressures show no sign of letting up.