The European Union's Statistics Office reported today that consumer price index rose 3.5 percent in March on rising food and energy prices, after rising 3.2% the previous month well above median estimates of 3.3% rise only.

The ECB are stuck among rising inflation and prospects of slowing growth, Mr. Trichet reminded market players last week that the ECB remained Hawkish; as taming inflation was the Bank's main priority over the medium term, while some analysts were betting the ECB will be forced into cutting their interest rates to face the aftermath of a U.S credit meltdown.

Another report showed that consumer confidence remained unchanged at -12 in March, while business climate rose unexpectedly to 0.80 from 0.72, as for the economic confidence, it declined to 99.6 from the previous 100.1.

The U.S economy is seen to have entered recession already, while the aftermath on global growth are yet to unveil, yet economists still believe the aftermath should be severe to all major economies around the globe; Japan is seen to be slipping into recession as well, while the U.K are experiencing sharp slowdown to their economic activity according to the BOE chairman Mr. King, but all hope that China will be able to weather the storm and help global growth!

The U.S are to release their Chicago PMI today, economists believe the indicator will continue to show further weakness in the world's largest economy, even after the Feds had already cut a total of 3 percent off their interest rates since September 2007, driving rates down to the current 2.25 percent!

Can central banks rise to the challenge? A very important question that is yet to be answered, so far the Feds have failed in their quest to help the economy go back to its winning ways, while other central bankers around the globe are trying to learn their lessons from the Feds.

Yet the situation looks rather uncomfortable for the ECB, especially if growth started to slowdown in the 15-nation economy, investors might start thinking stagflation and this should prove to be difficult to deal with as well, should they ECB hike their interest rates or just remain cautious and hold steady till uncertainties could be cleared out!