ECB raises rates if inflation does not decline

The European Central Bank will be forced to raise interest rates if consumer prices do not slow down at the end of 2011. This statement was made a member of the bank's Governing Council Jose Manuel Gonzalez-Paramo. "The ECB is confident that the observed acceleration of inflation - the time associated with the prices of some raw materials. We hope that the pace will begin to decline by the end of the year - said a top manager in an interview with ABC. - But if this does not happen, we will be forced to raise rates. We can not afford to lose control over inflation. The loss of confidence that inflation is fixed, will cause serious adverse effects. " Last week the ECB left interest rates at a record low - 1% per annum - and dispelled rumors of imminent rate increase. The regulator added that the higher than expected inflation in December did not affect his assessment of the medium-term price risks. According to Gonzalez-Paramo, stagflation eurozone is not threatened, but pointed out that Spain - are "isolated incident", as the kingdom to recover from the downturn in the property market after watching a ten-year boom. "Spain is looking for a new model. It should change the flow of its resources to carry out structural reforms," ??- he concluded. On materials K2Kapital