FRANKFURT, Aug 31: The European Central Bank on Thursday revised upwards its forecasts for inflation in the 12-country eurozone in both 2006 and 2007 to 2.4 per cent, from previous forecasts of 2.3 per cent and 2.2 per cent, respectively.

The decision to upgrade the forecasts “largely reflected” high oil prices, ECB President Jean-Claude Trichet told a news conference here.

From the bank's point of view, “risks to this outlook for price developments remain on the upside.”

“They include further increases in oil prices, a stronger pass-through of past oil price rises into consumer prices than currently anticipated, additional increases in administered prices and indirect taxes, and -- more fundamentally -- stronger than expected wage developments,” Trichet said. —AFP