THE PRESIDENT of the European Central Bank (ECB) has warned inflation could remain at a "worryingly" high rate in the 15 eurozone countries for some time.

Jean-Claude Trichet told the European Parliament the current inflation rate of 4 per cent, which is double the ECB's target level, will moderate "only gradually in 2009".

Speaking in Strasbourg, Mr Trichet said last week's 0.25 per cent increase in the ECB interest rate to 4.25 per cent will help policy makers get to grips with the highest inflation level the euro region has seen in 16 years.

"The governing council's current assessment is the monetary policy stance will contribute to achieving price stability over the medium term.

"We will continue to monitor all developments," he added.

Mr Trichet also cautioned governments against wage rises that could further fuel the problem.

"The governing council is strongly concerned that price and wage-setting behaviour could add to inflationary pressures through broadly-based second-round effects. First signs are already emerging in some regions of the euro area," he said.

Mr Trichet attributed the growing inflation problem to downside risks such as unanticipated increases in commodity prices, tensions in financial markets and increasing protectionist tendencies.

"This action underlines the governing council's strong determination to prevent second-round effects and maintain longer-term inflation expectations firmly anchored in line with price stability," he said.

The uncertainty surrounding the outlook for economic growth remains high with ECB staff projections suggesting economic growth may weaken to 1.5 per cent next year from 1.8 per cent this year and 2.6 per cent last year.

Fianna Fáil MEP Eoin Ryan, a member of the EU Parliament's economic and monetary affairs committee, said he regarded Mr Trichet as a "voice of stability" who could guide the European Union's economy through this difficult period.

Mr Ryan said there appears to be no plan to increase interest rates again and that the long-term results brought about by the current levels will make people realise it has been a good decision.

"They are attempting to strike a balance between controlling inflation and not damaging economic growth.

"Spiralling inflation could be very damaging to both Europe and Ireland and it is important we keep this in mind when considering these interest rate hikes," Mr Ryan said.