ECONOMY

Garganas warns on inflation

FRANKFURT (Reuters) – Risks to eurozone inflation are increasing, European Central Bank (ECB) Governing Council member Nicholas Garganas was reported as saying yesterday. Garganas told the Bloomberg news agency that although lower oil prices would dampen inflation in the near term, it was expected to increase again. Wage settlements and high liquidity remained the key risks to prices. «The risks to inflation are clearly on the upside, and are growing,» he was quoted as saying in the interview, conducted on Monday. The ECB is widely expected to raise interest rates to 3.75 percent next week, its seventh hike since December 2005, but markets are looking for clues as to whether the tightening cycle is now nearing an end. «We just need to wait for the relevant data to assess how the expansion is unfolding and then make a judgment about possible further action,» Garganas said, according to a copy of the story. «If we have to act we will do so, I assure you. We always act pre-emptively.»