Euro-zone inflation developments are alarming and require tough action from the European Central Bank, Governing Council member Klaus Liebscher said.
News agency Market News International said Liebscher declined to comment specifically on whether one interest rate rise in July would be enough to contain inflation expectations. "We will have to see what the future will bring. But we have to be tough," he was quoted as saying at a weekend event in Innsbruck. "This inflation we have now, which obviously is more protracted than we thought, is alarming."
Financial markets expect the ECB to raise rates from 4 per cent to 4.25 per cent at the next meeting on July 3. Inflation in the 15-nation region is a record 3.7 per cent.
"The most important thing is, on the one hand, to bring down the inflation rate itself and, on the other, to anchor firmly inflation expectations according to our understanding of price stability so that nothing happens in that respect," Liebscher said.
However, Bank of England Monetary Policy Committee member Andrew Sentance, said Britain must ensure that a temporary episode of rising inflation does not feed into wage and more general price increases.