European Central Bank officials speaking at the G7 meeting over the weekend in Singapore have said that inflation pressures may persist beyond next year, indicating they will keep raising interest rates into 2007.
ECB council member Axel Weber and ECB president Jean-Claude Trichet both said they will exercise 'strong vigilance' against rising prices, using the same language they have used to signal four interest-rate increases in the past ten months.
The bankers are preparing the ground for an increase next month in the benchmark rate from 3%. Investors expect the ECB to raise the rate to 3.5% by the end of the year.
