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By contrast, a year ago the cost of living adjustment was 5.8percentt, reflecting strong inflation and high energy prices.
Turkey's central bank failed to raise rates today, despite strong inflation, a big current account deficit and a weak lira.
"Korea missed a window of opportunity last year when growth was strong, inflation was low, and there was tremendous interest in bidding for Korean assets," Mr. Tao said.
After years of macroeconomic instability, growth has been steady and strong, inflation has been controlled and foreign investment has shot up.
Growth is strong, inflation falling, employment rising, and the National Institute Economic Review notes in its latest report: "Currently there seems to be little inflationary pressure from the labour market".
"Something we did not expect to happen has happened," said Lawrence Meyer, a fellow at the Center for Strategic and International Studies and a former Fed governor, noting the surprisingly strong inflation of the last four months.
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With no strong German candidate, analysts speculated that European heads of state, who will make the final decision, might choose a central banker from a smaller country with strong inflation-fighting credentials.
Mr. Tarullo described himself as a member of the "'show-me' camp" that wants to see evidence of stronger inflation before raising rates.
So far, the mysterious virus — believed to cause an unusually deadly form of an infection known as blue-ear pig disease — has spread to 25 of this country's 33 provinces and regions, prompting a pork shortage and the strongest inflation in China in a decade.
The economy here is doing so well and China international competitiveness is so strong that inflation is starting to appear.
Meanwhile the strong UK inflation figures are likely to dispel any talk of another Bank of England rate cut, which is helping to support the pound.
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