Brussels (Reuters) - the European Central Bank reported that it raise interest rates again next week that the data showed inflation in June stabilized well above the Bank targets.
"We are firmly committed to ensure that inflation expectations remain firmly in line (with our expectations),"the ECB President, Jean-Claude Trichet said Committee on economic and Monetary Affairs of the European Parliament in regular testimony."
"Monetary policy is accommodative and... as I said, we are in a State of high vigilance,"he says. ".
The words "strong vigilance" was regularly deployed to signal a rate hike at the next meeting and the ECB met the rate of interest next Thursday.
The euro hit fresh against the dollar in response up to three weeks, while it also is remained supported as the Greece moved a step closer to obtain international assistance after they voted for austerity measures.
Statistical Office of the European Union, said consumer prices in the 17 countries using the euro 2.7 per cent higher in June a year earlier, the same as in May. Economists surveyed by Reuters had expected a figure of 2.8%.
The ECB wants to keep inflation below, but close to 2%, and already raised its interest rate refinancing in April by 25 points to 1.25% to curb the growth of prices.
No breakdown of the monthly data is available with an early estimate, but the June inflation is likely to be largely a result of more expensive oil.
"There are signs indicating that the euro area price pressures begin to ease, although much will clearly depend on the evolution of oil prices," said Howard Archer, Economist at IHS Global Insight.
He said "slowing the growth of euro area after the highlight of the first quarter and unemployment remains relatively high are likely to curb the underlying inflationary pressures,".
"It is noteworthy that confidence survey companies and consumers the European Commission for June showed consumer inflation expectations significantly falling for a second consecutive month and pricing expectations among companies fell in all sectors", he added.
The use of Trichet of the keyword phrase "strong vigilance" to report a rise in rates ends the speculation on the markets that the Bank could delay the further increase in borrowing costs because of the debt crisis in Greece and the threat of contagion poses in other countries of the euro area.
But economists said the problems of the Greece and their potential impact on the euro area still could delay of the Bank the next rise in interest rates, expect to this what economists will occur later this year, taking the rate of refinancing of 1.75%.
"Slowing the growth of the eurozone, evidence that underlying inflationary pressures remain moderate and still serious concerns about the Greek situation suggest that the ECB could delay for some time even after the reported July interest rate hike," said Archer.
(Reports by Jan Strupczewski, additional reporting by Paul Carrel in Frankfurt, Rex Merrifield-mounting)
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