Euro zone finance ministers, trade unions and German banks piled pressure on the European Central Bank (ECB) yesterday to hold fire on interest rates as the ECB repeated that it could raise borrowing costs at any time.

While the ECB says there is no evidence so far that high oil prices have triggered knock-on inflationary pressure through big wage demands, it says that it is worried and will change rates if needed to fend off what it calls second-round inflation.

Leading the charge against a rate hike that financial markets believe might come as soon as December, Jean-Claude Juncker, chairman of the Eurogroup club of euro zone finance ministers, said: "My impression is that until now we don't have second-round effects and the ECB should take these non-second round effects into consideration."

Ministers from Austria, Spain and the Netherlands voiced similar worries as Mr Juncker and all the finance ministers of the 12 euro zone countries met in Brussels, where they were due to raise the matter with ECB president Jean-Claude Trichet.

"There aren't any second round (inflation) effects at the moment... therefore, I think a steady hand is sensible," Austria's Karl-Heinz Grasser said.

Prior to arrival in Brussels, Mr Trichet repeated in Switzerland that the ECB could raise rates from current historic lows of 2 per cent at any time to head off inflationary expectations.

His comments followed publication of a newspaper interview where ECB board member Nicholas Garganas said the ECB could raise rates if economic growth got stronger next year even if inflation fell below 2 per cent, the ECB's benchmark for inflation control.

Economists and policymakers believe growth may be picking up and is predicted to come in at little more than 1 per cent this year. But so far growth is not creating many new jobs.

Some commercial banks saw the ECB's credibility would remain intact if the bank kept rates unchanged for a while longer.

The German banking federation said in a monthly report that the ECB should be in no hurry to raise rates, but wait instead for developments in economic growth, energy prices and wages.

More calls for stable monetary policy came from the European Trade Union Confederation (ETUC), which groups 60 million workers. The ETUC called on the ECB not to make credit more expensive at a time when the economy was only beginning to recover, especially given that wages remained under control.

"The clear message is: 'don't raise interest rates'," ETUC deputy general secretary Reiner Hoffmann said.

His organisation meets Mr Trichet and others today and he argued that wage rises had been modest for most of the past decade, so there was no reason to think that unions would not continue to behave responsibly. - (Reuters)