Pressure is mounting on the European Central Bank (ECB) to cut interest rates, despite rising inflation across the euro zone.

European finance ministers joined forces with the markets to encourage the ECB to cut rates in the wake of the decision of the US Federal Reserve to cut rates earlier this week to below those in the euro zone. The French finance minister and the Belgian chairman of the euro group of ministers called on ECB chief Mr Wim Duisenberg to act.

Analysts said the US central bank move put the ECB even further behind events, as the United States and Japan headed for a slowdown that would brake global growth.

However, in its latest monthly report, published yesterday, the ECB implies that interest rates will remain where they are for now and that there are "no indications of a risk of global recession". Mr Colin Hunt, chief economist at Goodbody Stockbrokers, said perhaps Mr Duisenberg "should ring the Fed chairman, Mr Alan Greenspan, who is of a different view, having slashed interest rates by two percentage points in last four months".

He added that The ECB's statement that consumer confidence remained high was "intriguing, given that it is now in negative territory across the euro zone", he said.

The ECB report continues to focus on consumer prices, which rose again in March across the euro zone. According to the report: "all the upside risks [to inflation] have not disappeared." It says a broad upward movement in prices has been in existence since late 1999.

Inflation in the euro zone rose 0.4 per cent in March from February and 2.6 per cent from a year earlier, according to figures released yesterday.

The ECB has left interest rates at 4.75 per cent since October 2000 and the last time it cut was in April 1999. The central bank next meets to discuss rates on April 26th.