The European Central Bank (ECB) will monitor inflation dangers very closely after raising interest rates by a quarter per centage point to 3.25 per cent, bank president Jean-Claude Trichet said this afternoon.
The wording helps to confirm market expectations of another interest rate rise in December as the euro zone recovery continues on track and inflation risks linger, despite a drop in the headline inflation rate.
"The Governing Council will . . . continue to monitor very closely all developments so that we ensure price stability over the medium and longer term," Mr Trichet told a news conference after the rate decision.
The central bank has used the phrasing that it will "monitor closely" or "very closely" inflation risks each time after it raised rates in the past 10 months.
Then it has waited either three months, and more recently two months, before tightening rates again - an action that has been preceded by using the word "vigilance" over price risks.
He repeated another key sentence from past monetary policy statements: "If our assumptions and baseline scenario are confirmed it will remain warranted to further withdraw monetary accommodation," he said.
Analysts say this phrase means the central bank plans to continue gradually raising rates, probably in 25 basis point increments as it has since last December.