Accelerating money supply growth alone will not automatically lead the European Central Bank (ECB) to rush to raise interest rates to forestall inflation, ECB board member Prof Otmar Issing said yesterday. Prof Issing said the ECB would raise interest rates only when other economic indicators made a compelling case - and so far they had not.

M3 money supply in the euro zone grew 6.1 per cent in September from a year earlier, substantially faster than the rate of 5.7 per cent in August, and Prof Issing said this "confirms the trend of strong money growth". But "I would like to stress that our strategy does not imply any mechanistic reaction to these developments".