HELSINKI, Jan 20: European Central Bank Governing Council member Erkki Liikanen said there were still upside risks to inflation in the euro zone, Finnish national broadcaster YLE reported on Saturday.

Today, the risks on prices are on the upside, there is ample liquidity,” Liikanen told TV programme Lauantaiseura.

The ECB has raised official rates to 3.5 per cent over the last 14 months, citing ongoing price risks. Markets are braced for a possible further hike to 3.75 per cent by the end of March.

Every decision (on rates) is made based on the latest available information and we have not decided beforehand on any actions, Liikanen said in a Finnish language interview.

Lower oil prices brought inflation down to 1.9pc in Dec, but Liikanen, who is governor of the Finnish central bank, stressed the council has longer than just a few months perspective when deciding on rates.

Monetary policy impacts with a delay, our aim is to secure medium-term price stability, he said.

Liikanen said the world's economy is set to grow 4.5 to 5pc this year, with the main risks coming from slowing growth in the US economy and ample monetary liquidity.

Liikanen said he expects the German economy to grow faster than 2pc in 2007 as its policies on improving its competitive position and cutting the budget deficit are starting to bear fruit, increasing consumer confidence in the economy.—Reuters