Last week, the Federal Reserve, European Central Bank, Bank of England, Bank of Japan and Bank of Canada all left interest rates unchanged. A common thread behind these decisions is a simple principle: central banks think it is better to be late than to be wrong. Faced with an energy shock that may fade as quickly as it appeared, policymakers are waiting to see how the economy responds rather than reacting to headlines. The question is not whether energy prices have risen. They have. The question is whether the shock will persist and spread into wages, services prices and expectations. On that, the evidence is still ... (full story)