The European Central Bank sent a strong signal today that it was planning to raise its key interest rates again next month after already raising them three times since December.
The ECB has raised its benchmark 'refi' refinancing rate three times since the end of last year, each time by a quarter of a percentage point, with the last move on June 8 bringing the key rate up to 2.75%.
The ECB held its key rates steady at its regular monthly policy-setting meeting in Frankfurt today.
But ECB chief Jean-Claude Trichet signalled a further tightening of monetary conditions in the single currency area as soon as next month at a news conference following today's decision.
First, Trichet said the ECB would exercise 'strong vigilance' with regard to the potential inflationary risks in the 12 countries that share the euro, using a term which the financial markets view as the bank's watchword for an imminent rate rise.
Secondly, the Frenchman announced that the ECB's rate-setting governing council is would meet in person on August 3, instead of via the planned teleconference.
'We have decided to meet physically on August 3, instead of via teleconference,' Trichet told today's news conference.
The ECB traditionally holds its August meeting on interest rates by means of a teleconference and without the usual press conference afterwards.
But this year, the governing council would convene in person in the bank's Eurotower headquarters and Trichet would give a news conference afterwards, suggesting that a further upward move in borrowing costs was imminent.
