Senior members of the European Central Bank (ECB) are playing down the prospects of an imminent rise in euro zone interest rates despite a growing conviction in financial markets that the ECB is likely to move earlier than once seemed likely.

Mr Tommaso Padoa-Schioppa, a member of the ECB's six-person executive board, has suggested the markets would be wrong to read too much into a statement in July by the ECB's president, Mr Wim Duisenberg, to the effect that a tightening bias was "creeping" into the central bank's deliberations.

Mr Padoa-Schioppa observed that, in contrast to the US Federal Reserve, the ECB did not have an official policy of announcing biases in one direction or another in its monetary stance. He also commented that Mr Duisenberg "did not set any time horizon" for a tighter policy.

Meanwhile, two other executive board members, Mr Otmar Issing and Ms Sirkka Hamalainen, have been making a point of stressing the absence of inflationary risks in the euro zone.

Taken together, the remarks appeared to rule out an interest rate rise before the end of 1999, economists said.

When the ECB cut its benchmark rate last April by 0.5 points to 2.5 per cent, Mr Duisenberg declared, "This is it" - implying that interest rates would remain unchanged for a long time. However, that reduction was larger than financial markets had expected and left a lingering suspicion that the ECB would plan its next move as a surprise.