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lower but to put that into context it was at zero in europe this time last year. and in the world s largest economy the us, the cost of borrowing is at 5% to 5.25%. but critics point out rising interest rates is a blunt tool that comes with its own set of dangers that can pose further risks to the economy. so what else can be done? well, central bankers are getting together today in portugal to chew over this challenge. joining me now isjennifer mckeown chief global economist at capital economics. good morning to you, jennifer. so it s a lovely location, portugal, you got christine lagarde there, andrew bailey, jerome powell among others, what do you think they will chew on? of course they re all increasing the cost of borrowering and in some places like the uk, so far it s having little effect. little effect. yeah, you re ri . ht. little effect. yeah, you re right. beautiful little effect. yeah, you re right. beautiful location, | little effect. yeah, you rel rig ....
Now, the deputy head of the imf and she said yesterday that actually the financial risks posed are great, that perhaps central bankers should accept higher inflation for longer and not necessarily hell bent on hitting a 2% rate for the uk and the us is the target. yes, that s right- and the us is the target. yes, that s right. when and the us is the target. yes, that s right. when raising - that s right. when raising interest rates there are always concerns that something in financial markets might break essentially, another large bank might go under, problems in pension funds, there might be issues in the housing market that could cause problems in the banks t issue for the central banks is they don t try to tame inflation now, it may notjust to tame inflation now, it may not just stop where to tame inflation now, it may notjust stop where it is, it may get higher and higher as people push for increasingly higher wage gains and this feeds into prices an firms try to maintain their ....