Inflation fight like 'Midgard Serpent' eating own tail

Breki Karlsson, chair of Neytendasamtökin (the Consumers' Association of Iceland), says rising inflation has direct and wide-ranging effects on consumers. He says the latest measurement, showing inflation at 5.6 percent, is “unfortunately” no surprise. Breki likens persistent inflation and attempts to bring it under control to a vicious circle. The situation is a bit like the Midgard Serpent eating its own tail, or whatever other analogy people want to use for this kind of vicious circle. Breki says it is “bordering on madness” to keep doing the same thing and expect a different result. He is referring to the reliance primarily on interest rate rises to fight inflation. “The definition of madness” So-called imputed rent, that is, the estimated amount of money a homeowner would pay to rent a home that is identical to the one they already own and occupy, rose in the latest figures. Breki says it can be assumed that this is precisely because of increases in the Seðlabanki Íslands (Central Bank of Iceland) interest rate - which is supposed to combat inflation. It therefore follows that interest rates are working against their main purpose [...] Doing the same thing over and over again