Central bankers around the world must be looking at Brazil with mixed emotions. The Central Bank of Brazil’s policy interest rate cut from 12.5 to 12 per cent inspires admiration, fear and jealousy.

The admiration is for continuing boldness. The central bank is responding bravely to the sudden deterioration in the global economic environment. If the global summer soft patch ends soon, or if Brazilian inflation starts to rise again, it will look foolish. But the slowdown bet looks good, if Thursday’s releases of surveys of manufacturing sentiment are any indicator: at recessionary levels in the UK and the lowest in two years in the eurozone.

Brazilians are also admirable in their battle against the now fading tradition of high inflation. Even after the cut, the overnight rate is about