Likely US recession ‘will slow European growth’

"In the United States, growth is probably negative for a couple of quarters ... this impacts other regions, but it is not direct or mechanical," said Liikanen, who also heads the Bank of Finland. "Growth will also slow here, but there will still be growth in Europe."

He added, "We have to gather all available information and make decisions which secure price stability ... ensuring price stability is the logical thing to do."

Liikanen said there is pressure on prices in the short-term, and singled out food prices.

The recent rise in food prices is due to higher living standards in developing countries, bioenergy production and climate change, which could reduce crops, he said.

He warned that increasing bioenergy production might push food prices up further if more fields are used for cultivating bioenergy plants.

The ECB has kept interest rates on hold at 4 per cent since the start of the U.S. subprime mortgage crisis last summer, and in recent weeks the inflation outlook has increasingly caused economists to write off the chances of an ECB rate cut this year.