ECB in a quandary as inflation rises sharply

The European Union's statistics office said on Monday 31 March that consumer price inflation accelerated to 3.5% this month from 3.2% in February, the biggest rise since June 1992, further exacerbating the European Central Bank's (ECB) monetary policy dilemma.

The boost in inflation has all but ruled out a rate cut before June. But even though the region's economy has remained resilient in the wake of the subprime fallout, the ECB will find it difficult to raise rates, especially on signs that

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