The Minister for Finance has insisted that inflation remains likely to average 4.25 per cent during 2002, despite last month's rise in consumer prices. In the Spanish city of Oviedo, where he is attending a meeting of EU finance ministers, Mr McCreevy said the figure for March released yesterday was slightly lower than expected. But he warned that uncertainty about the price of oil could yet throw the Government's economic predictions off course.

The Economic Affairs Commissioner, Mr Pedro Solbes, acknowledged that rising oil prices could become a cause for concern but he said that it was unlikely to affect economic growth in the EU if the price remained below $28 a barrel.

Yesterday's price was fluctuating around $25 a barrel. The ministers are today expected to nominate the governor of the Greek central bank, Mr Lucas Papademos, to succeed Mr Christian Noyer as vice-president of the European Central Bank (ECB). Belgium insisted yesterday that its candidate, economics professor Dr Paul De Grauwe, remained a contender. But Spain's finance minister, Mr Rodrigo Rato, predicted today's choice would be unanimous.

A former economics professor, who worked for a year at the US Federal Reserve, Mr Papademos is the candidate favoured by his colleagues on the ECB's governing council. He is credited with ensuring that Greece made a smooth entry into the euro zone last year and has been a firm defender of central bankers' independence from politicians. Mr McCreevy gave a cautious welcome to a proposal by Germany and Britain to reform banking supervision in the EU.

A joint letter from Germany's finance minister, Mr Hans Eichel, and Britain's Chancellor, Mr Gordon Brown, is understood to favour keeping regulation in the hands of finance ministers and independent regulators and excluding the ECB.