The European Central Bank signalled it would raise interest rates again next week as data showed inflation in June stabilised well above the bank's target.

The European Union's statistics office said consumer prices in the 17 countries using the euro were 2.7 per cent higher in June than a year earlier, the same as in May.

The ECB aims to keep inflation below but close to 2 per cent and raised its refinancing interest rate in April by 25 basis point to 1.25 per cent to curb price growth - its first hike in two years.

"It is of paramount importance that the current rise in inflation does not give rise to broad-based inflationary pressure," ECB president Jean-Claude Trichet told the European Parliament's economic and monetary affairs committee just before the figures were released.

"The current monetary policy is accommodative and ... as I said we are in a state of strong vigilance," he said.

The phrase "strong vigilance" has regularly been deployed to signal a rate hike at the next meeting, including before April's move. The ECB meets on interest rates next Thursday.

Mr Trichet's use of the "strong vigilance" phrase to signal a rate rise scotched market speculation that the bank could delay another increase in borrowing costs because of the debt crisis in Greece and the contagion threat it poses to other euro zone countries.

But economists said Greece's problems and their potential impact on the euro zone could still make the bank delay the next interest rate rise, which economists expect will happen later this year, taking the refinancing rate to 1.75 per cent.

The euro hit a fresh three-week high against the dollar in response. It also remained supported as Greece moved a step closer to securing international aid after voting in favour of austerity measures.

Reuters