European Central Bank: 'Strong Vigilance' Needed To Fight Inflation

FRANKFURT (Sakari Suoninen) - The European Central Bank is in "strong vigilance" mode over inflation pressures, ECB President Jean-Claude Trichet said on Thursday, using code words to indicate an interest rate increase is probably only a month away.

"Strong vigilance is warranted," Trichet told a news conference after the bank kept interest rates at 1.25 percent.

He said evidence since the ECB's May meeting confirmed "continued upward pressure on overall inflation mainly owing to commodities and energy prices."

The ECB used the phrase "strong vigilance" in March before increasing rates in April. It also used the phrase repeatedly during its 2005-2007 rate hike cycle, typically one month before it raised rates, although there were exceptions to that rule.

Euro zone inflation was 2.7 percent last month, well above the ECB's target of close to just below 2 percent.

(Editing by Mike Peacock)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[Hai Vo Thanh]

03:48 AM on 06/10/2011

Great news..thanks..

[WESTistheman]

02:23 AM on 06/10/2011

Vigilance or better yet, more Obama money to bail out Keynesian economic socialists.

[procrustes13]

09:09 PM on 06/09/2011

Mother, mother, mother, please, mother please! Don't do that! Don't do that! So spoke Jim Jones whose spirit clearly is animating these maniacs the European Central Bank. Jones at least shot himself so at least we can give him credit for that. People like this banker will instead be handsomely rewarded for their destruction.

[haljett]

02:23 PM on 06/09/2011

Got to love that catch phrase "Strong Vigilance." Why can't we just use words everyone else uses? Is it so important to appear that much more intelligent than the guy or gal working twelve hours a day to put inflated food on their plates?

It was little surprise to me to watch gold and silver spot price spike today after this announcement. Track it for yourself for free http://www.learcapital.com/exactprice

Be vigilant for yourself and don't let these rare air breathing folk do all the thinking.

[cadawa]

12:31 PM on 06/09/2011

Rich people looove inflation. They are the ones calling the shots.