The European Central Bank cannot complain that it is short of advice when it comes to its current position on interest rates.

This week alone, it has heard from both the United Nations and the International Monetary Fund, both of which urge a cut in rates. Interestingly, both proferred their advice in the context of the EU as the world's second-largest trading bloc playing its part in reviving stagnating world economic growth.

Not surprisingly, the ECB chose to ignore the advice when it left rates unchanged on Thursday. Like a mantra, the bank's governing council asserts that its only interest can be in meeting the inflationary target it has set itself. The downside of this argument is twofold.

First, it is certain that a world economic slowdown will affect the European Union, regardless of the pronouncements from certain quarters. We were reminded this week that Ireland could well suffer more than most because of its reliance on US foreign direct investment.

Second, when the ECB does cut rates, it seems likely inflation will still be above the 2 per cent target. Given its current obduracy, the bank will have difficulty persuading markets then that it is following a clear policy path.