European Central Bank President Jean-Claude Trichet said on Monday medium-term price stability in the eurozone was essential for economic growth and job creation. "Price stability in the medium term is essential, not only because it protects the revenues of our citizens, particularly those most vulnerable, but also because it is a precondition for growth and job creation," he said in a speech prepared for delivery in Luxembourg.
Trichet was speaking after data showed inflation in the 15-country eurozone rose to an all-time high of 4.0 percent in June from 3.7 percent in May. The ECB's Governing Council meets on Thursday amid market expectations it will raise interest rates slightly to contain the increase in inflation.
The ECB chief also said on Monday that central banks needed to watch for the impact that lower barriers to trade and doing business around the world were having on prices. "Globalisation requires attention of the central banks because of its effect on relative prices of goods and services," he said, adding that it was pushing down prices of manufactured goods but boosting commodity costs. High oil and food prices are considered the biggest factor behind the recent surge in inflation.