European Central Bank to stay firm on interest rates

Trichet told the BBC in an interview that policymakers needed to make containing inflation their priority. 'Price stability and credibility in price stability in the medium term is the best way to have a high level of sustainable growth and sustainable job creation,' he said. The ECB chief said inflationary pressures were being added to by an accumulation of oil price rises and food price rises. The ECB has left its benchmark policy rate unchanged at 4.0 per cent throughout the financial market crisis, and in the face of consumer price fluctuations. Eurozone inflation slowed to 3.3 per cent in April from 3.6 per cent in March, which is still higher than the ECB's 2.0 per cent ceiling. Trichet also warned governments not to make the wrong moves and risk the knock-on second round effects of inflation which followed the last oil price shock in the 1970s.