The European Central Bank yesterday declared itself against efforts to use interest rate changes as a tool of short-term economic management, saying such a policy would be bad for jobs and economic growth.

In its monthly bulletin for November, the ECB indicated that its aim was to keep long-term interest rates low by avoiding frequent changes in monetary policy that could increase uncertainty in financial markets.

Economists said the report helped explain why the ECB had raised interest rates last week by 0.5 percentage points rather than 0.25 percentage points, bringing the benchmark refinancing rate back to the level of 3 per cent at which it stood in early April.