Robin, the ECB has raised rates by a quarter point. Where do you see rates going from here in the eurozone?

Of course, within the eurozone, the story is extraordinarily complicated. They have a very strong economy in Germany. They have a lot of weakness in the peripheral economies and of course a lot of fiscal stresses and the higher interest rates are making those things worse.

So the ECB is trying to balance this strength in Germany, worries about inflation, their own credibility against these fiscal problems around the edges and our position on where they're at is a little bit of a rate rise. We've had one. We're probably going to get another one, but then they will hold pat and hope that growth in the peripheral starts to strengthen a bit more.

So they're doing just enough to make the markets aware that they're focused on this but not so much as to kill the economy.

But when we look at what's going on around the edges, obviously Portugal has just had to have a bailout, or is just asking for a bailout. Ireland and Greece already have and lots of focus on Spain and other countries. We think the mood music around economic stability within the eurozone is going to remain pretty negative and as a result, we think the euro is going to struggle to make any substantive gains despite the fact that interest rate policy will be a little bit more aggressive in Europe than we expect it to be in America.

When we go out over the course of the next 12 months or so, we think the kick from oil prices will start to fade in terms of the impact on inflation and indeed, we think oil prices will come off a little bit because we see a bit more supply coming onto the oil market.

In terms of food price inflation as well, to the extent that supply issues have been behind some of the price pressures, those supply issues will ease. We've seen better harvests in some markets already in Africa, for example, so those things will start to ebb away and fundamentally, we still see economic growth in the richer countries around the world as being relatively soft.

So we think that look out 12 months, look out 18 months, inflationary pressures will be a bit softer than they are at the moment, so right now there is certainly a problem, but we do think that the lack of demand strength in these big economies will actually allow inflationary pressures to ease.

But the issue right now is, of course, that inflation has been very high and that does undermine the credibility of Central Banks and the ECB has had to do something about that.

For Portugal, who had done quite a bit relative to perhaps their more recent history, Portugal didn't really have much of a record in being very aggressive in terms of structural reform and managing their budget particularly well, they have become much more aggressive recently, but it clearly wasn't enough. They're going to need some support.

But I think the difficulty for a lot of these countries in the periphery is the need for them to keep a tight grip on the public finances is of itself crimping growth and that means that tax revenues are difficult to find and therefore it's very hard to see how these budgetary positions are going to get any better, which is why of course ultimately we've already seen three countries ask for help and there is a lot of worry that that list might expand.

I think it's important to realise, though, that actually consumer demand was likely to be pretty soft anyway. If you look to Europe, we're already in austerity mode, consumers are carrying a lot of debt. Outside of Germany, consumer demand really wasn't that impressive anyway.

In America, we did see stronger consumer spending, but that was largely because government fiscal policy had been pretty supportive of the consumer. But of course now the fiscal story in America has changed completely, we're into a budget cuts-type mode, so support for the consumer from that area is going to disappear, so we're already saying that consumer spending was going to soften and of course worries about higher energy prices, for example, just make that problem worse.

So I think the story again for Europe and America is relatively soft consumer demand that ultimately translates to soft economic growth.

But some of the countries, particularly the ones that really need growth around the periphery, they are not price competitive and often they don't even have industries which produce things that other people want to buy.

So if you look to Greece, now what do they do? There is a lot of agricultural products where they're not really very price competitive and tourism, and again within the eurozone they're not very price competitive there, so where are exports coming from for them? Not a very different story for Portugal either.

Ireland is in a bit of a better place because it does have a more interesting diverse industrial base. Their economy, of course, is in a bad state, but you might hope that you can see how they might start to turn that around in terms of their industrial performance.

There are other countries that people are worried about like Spain, which looks similar to Ireland in as much as they have a more diversified economy. You might hope that we could get a bit more traction there.

But I think the idea that everyone can export their way out of trouble is completely wrong and the ability to do that drops to the ones that are most competitive and those actually are the ones that least need the support. So Germany, for instance, is the benefit.

Libya is an important oil player, but it's not a very big player. It was doing about 1.6m barrels a day prior to this. During the worst of the fighting that dropped off to practically zero. That kind of oil production can and is being covered by other producers, so particularly Saudi Arabia but other markets too like Kuwait.

The reason oil prices are high is that markets are concerned that the unrest that we see in Libya, and of course that we have already seen in Egypt and Tunisia, might spread to bigger oil producers.

So people are looking at Iran which is still a very substantial player. Of course people look to Iraq where recently production has been increasing and of course, ultimately, people look to Saudi Arabia itself which is the world's biggest exporter. That's what's worrying the markets.

Now, we think that Libya will reach some kind of stalemate and there will be a sense that the instability in the rest of the region will be kind of managed and controlled and as a result, perhaps oil market participants will get a little bit of their confidence back.

We also do expect to see more oil supply coming onto the market because of non-OPEC investment recently and also some OPEC investment, for example, in Iraq.

So we do think by the end of the year oil prices will be coming back down a bit but that is, of course, contingent on instability in the Middle East coming to an end. If that doesn't happen, then the sky is almost the limit and if we started to see serious concerns about Saudi Arabia, there literally is no limit to how high prices could go. So it is very contingent on the Middle East perhaps stabilising. We think it probably will, but of course there is no guarantees there.