EUROPE - The European Central Bank has indicated it will raise interest rates for a second time in four months at next week's meeting.
ECB president Jean Claude Trichet (pictured) hinted a second rate hike will be agreed on 7th July, as inflation figures are released showing prices across the region were 2.7% higher in June than a year ago, Bloomberg reports.
"It is of paramount importance that the current rise in inflation does not give rise to broad-based inflationary pressure," Trichet told the European parliament's economic and monetary affairs committee.
"The current monetary policy is accommodative and ... as I said we are in a state of strong vigilance," he said.
Trichet's comments come a day after the Greek government approved its unpopular austerity plan amid ongoing social unrest.
The country is still tipped to default within the next two years amid fears it will not be able to implement its tough package of tax increases and pensions reform.
The euro surged against the dollar after Trichet's remarks, climbing by 0.6% to $1.4521.
A second hike in July would follow a move by the central bank to raise its benchmark interest rate by 25 basis points, to 1.25%, in April.
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