The European Central Bank on Friday mounted a robust defence of its first interest rate rise in five years, playing down the chances of an economic backlash.
Led by President Jean-Claude Trichet, ECB policymakers hit the airwaves around the 12-nation euro zone, also stressing that the ECB does not plan to rush into further rate hikes. But criticism of the quarter-point hike built as politicians and economists took issue with the ECB's reasoning.
The ECB ended more than two years of record cheap credit on Thursday when it lifted benchmark ECB rates by a quarter point to 2.25 percent.
"We raised interest rates because the risks for future inflation had risen," Trichet said in an interview with EuroNews television, to be broadcast on Friday evening.
"It's our mandate, it's what the treaty requires of us, and what households in Europe are asking for. The French, the Germans, the Spanish, the Italians ask us for assurances that prices are stable."
Trichet repeated that policymakers had not decided on a series of US-style rate hikes at Thursday's meeting, but also made no promises on the future.
"We took the right decision ... we'll see if we will take other decisions, but we haven't decided ex ante to proceed with a series of rises."
Interest rate futures markets still expect rates to rise to 2.5 percent by the middle of next year, but on Friday were pricing in less chance of a second 2006 hike as policymakers sought to calm worries about further hikes.
"We did what we thought was necessary, so we have nothing else (up our sleeves) today," Christian Noyer, who heads the Bank of France, told Europe 1 radio. "But we don't know how we will assess the situation in the coming months."
ECB Executive Board member Jose Manuel Gonzalez-Paramo said the rate hike would not slow growth in Europe's main economies.
"There is no way to achieve sustained growth in the medium-term with high inflation," he told Spain's Cadena Ser radio.
"So to the extent that yesterday's decision seeks to keep a lid on inflationary expectations, medium-term growth is more assured."
Bundesbank President Axel Weber, Austria's Klaus Liebscher and the Netherlands' Nout Wellink also pushed the message home in interviews in their home countries on Thursday evening.
"We definitely did not want to send a signal for further rate movements," Liebcher told the Austrian Press Agency, describing the hike as a "moderate correction" in rates.
Appearing on a conference panel with Eurogroup chairman Jean-Claude Juncker, who attended the ECB meeting to make a plea for steady rates, Trichet kept the pressure on governments to boost growth through structural reforms.
Juncker told the Luxembourg event it was time to calm the debate between euro zone finance ministers and the ECB, saying it was important to protect the central bank's independence.
But earlier he expressed scepticism about the ECB's inflation fears, although he said one small rate rise would not hurt the economy. There had been a "debate on the reality of the inflation perspective" at Thursday's meeting, Juncker said.
"Given a certain number of downside risks concerning inflation, and also the fact that we have downside risks as far as economic growth is concerned, I don't think that yesterday's decision will hamper economic growth because it is moderate," he told reporters on the sidelines of the conference.
Other politicians were more explicit in urging the ECB to stop at the current level.
"What is very important for us is that the central bank indicated that (the increase) did not in any way involve the start of a cycle, which could have ... difficult consequences for growth," French Finance Minister Thierry Breton said, echoing comments from Germany's Peer Steinbrueck on Thursday.
Breton also said inflation was under control. Finance ministers will have the chance to raise their concerns with Trichet at Monday's Eurogroup meeting in Brussels.
The chairwoman of the European Parliament's economic committee, Pervenche Beres, said the hike risked killing the recovery, and pan-European business lobby Eurochambres said the ECB should show as much concern for growth as it did for inflation. "To raise interest rates in a fragile economic climate is certainly the wrong signal," Eurochambres President Christoph Leitl said in a statement.
The ECB move also sparked criticism from academic and research economists. Italian newspapers reported on Friday Nobel prize-winning economists attending a conference in Venice said the move was not necessary to curb inflation.