Sir, – Central banks raise interest rates to lower the rate of inflation, but not to reverse it. Lowering inflation does not lower prices, but lowers the rate that prices increase. While some prices may fall, like fuel and grain prices, having all prices lower is deflation, an equally bad scenario as high inflation. The reality is that when inflation falls to a lower level, most prices will stay at their new level. One of the worst things for a government to do in high inflation is to pour more money into the economy as this keeps inflation high, which only prolongs the misery.

Source: The Irish Times August 01, 2023 11:08 UTC