The State Bank of Pakistan has raised its benchmark rate by 50 basis points, to 13 percent; its first increase since November, since when it had maintained it at 12.5 percent. This step has been taken because of inflationary pressures the State Bank says that are caused by 'the governments expansionary fiscal stance, which is a polite way of saying the government not only lives beyond its means, but intends to keep on doing so. The State Bank has called for improving the tax-to-GDP ratio, which is another way of supporting the IMF-prescribed sales tax. The State Bank showed that it did not itself believe its earlier statements about the international situation, which it had blamed for the high interest rates it was maintaining. Though it had earlier hinted at the government, and its desire to borrow to finance its extravagances, it seems that the persistence and extent of the inflationary crisis have persuaded it in laying the blame where it lies: the governments uncontrolled spending habits. The State Bank has taken a gloomy view of inflation, which it has projected as remaining between 11 and 12 percent this fiscal, as opposed to the announced target of 9.5 percent. With even the official figure painfully high, the actual projection, which is likelier to go up as the fiscal year, which began on July 1, is likely to see a backbreaking year for the ordinary citizen, already battered by high prices. The State Bank should by now work out whether it is part of the solution, or part of the problem. By keeping interest rates high, it should wonder whether it is strangling an economy in desperate need of a stimulus. It should realise that its efforts will go waste, so long as the government does not rein in its spending. At a time of inflation, that is perhaps all that a Finance Minister can do. That neither of the Gilani Governments Finance Ministers have done so is not just a condemnation of the government, but also of the President who put them there, after bringing them with much fanfare from the private sector. Inflation is the governments headache, not the State Banks.