European Central Bank President Mr Wim Duisenberg said yesterday that euro zone inflation was likely to edge up in coming months on the back of rising energy prices but inflation expectations remained benign after the November 4th interest rate rise.

"Inflation in the coming months may gradually rise especially because the increase in energy prices will have an impact on consumer prices," Mr Duisenberg said in a speech at a conference of German employers. But he said this month's half percentage point rise in the ECB's key refinancing rate and two other money market rates ensured that "inflation expectations were well below 2 per cent".