ECB will increase interest rates in case of next inflation rise

European central bank (ECB) won't be indecisive in increasing the interest rates to prevent emphatic acceleration of inflation. The member of the ECB Executive board Jürgen Stark denied, that bank is facing a dilemma, wheter to suppress the inflation pressure or to support the peak season, which was muted by a turbulent motion at the financial markets. In addition, the ECB's main goal is to ensure the price stability. He insinuated that the ECB cut out a reduction of the interest rates in any foreseeable future.

ECB as the only one from the important banks within Europe and USA didn't draw the line at reducing the interest rates even after the turbulent motion at the financial markets, which caused mortgage crisis in USA. The main interest rate within the euro area remains at 4%. According to Stark, it will last a few months or a quarters to calm down the markets. He added that the new balance is possible only after the banks will announce every losses in connection with the risk investments.

Despite the idea of suppressing the inflation pressure, the rate of increasing the consumer prices reached the 6.5-year maximum 3,1%. Stark claims during the year 2008 the inflation begins to decrease towards the 2% after which ECB guarantee the price stability. The leading risk threatening a scenario like this, are increasing prices of commodities.