FRANKFURT, Aug 3: Eurozone interest rates are likely to rise further, even after the quarter-point increase by the European Central Bank (ECB) on Thursday, but there is no pre-set timetable, ECB President Jean-Claude Trichet said.Despite the quarter-point increase in the ECB's benchmark “refi” refinancing rate to 3 per cent, eurozone interest rates “remain low” by historical standards, he said.

A further “progressive withdrawal of monetary accommodation remains warranted”, Trichet told a news conference here.

The ECB's decision to tighten monetary conditions in the 12 countries that share the euro for the fourth time in eight months “reflects the upside risks pricing stability over the medium term,” the Frenchman explained.

“After Thursday's increase, the key ECB interest rates remain low both in real and nominal terms, money and credit growth remain strong, and liquidity in the euro area is ample by all plausible measures,” he said.

“Our monetary policy, therefore, continues to be accommodative. If our assumptions and baseline scenario are confirmed, a progressive withdrawal of monetary accommodation will be warranted,” Trichet said.

“Against this background, we will continue to monitor very closely all developments so as to ensure price stability over the medium and longer term.” Trichet insisted that the guardian of the euro was not tightening monetary conditions in the single currency area according to any pre-determined timetable.

“We are not pre-committed in any way. We do what is necessary when it is necessary,” he insisted.

Asked whether the decision to raise rates by a quarter of a percentage point on Thursday was unanimous, Trichet said that the 18-strong governing council “overwhlemingly supported” the quarter-point rise.

Meanwhile the Bank of England sprang a surprise quarter-point interest rate rise to 4.75 per cent on Thursday, the first rate move for one year to control inflation and economic growth.

The announcement shocked the forex market where sterling surged to $1.8868, the highest point since June 5, from 1.8721 earlier. The euro fell to 0.6772 pounds, last touched on May 16, from 0.6813 before the news.—AFP