BRUSSELS (AFX) - European Central Bank president Jean-Claude Trichet said the bank’s monetary policy must be credible in ensuring price stability.

“The decisive contribution the ECB’s single monetary policy makes to the smooth functioning of economic and monetary union is to maintain price stability — and be credible in the deliver in the future — in the euro area as a whole,” Trichet said in a speech at the European Parliament.

EU economic and monetary affairs commissioner Joaquin Almunia said that despite the ECB’s monetary tightening over the past year “lending conditions remain fairly favourable”.

The ECB’s governing council is widely expected to raise interest rates further next Thursday, citing the need to control inflation.

In figures published today, euro zone inflation for January eased to 1.8 pct from 1.9 pct in December. This tallies with the ECB’s inflation target of below or close to 2.0 pct.

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