The European Central Bank (ECB) needs to be particularly cautious about upward risks to price stability, the bank said in its monthly bulletin today.
The risk of high oil prices feeding into consumer prices and wages was an ongoing concern, though there were no signs so far of a build-up in inflationary pressures, the central bank said.
"At present, particular vigilance with regard to upside risks to price stability is warranted," the ECB said in the editorial, a close repeat of last week's monetary policy statement.
Previously, the ECB had simply called for "vigilance" regarding price risks, but inflation is still running above the ECB's 2 per cent threshold, with the most recent figures estimating it at 2.1 per cent in August.
Oil prices also remain high at more than $65 a barrel, despite a retreat from the $70 price seen in the immediate aftermath of Hurricane Katrina in the United States.
Economists do not expect the ECB to move rates until the second quarter of 2006, once more solid evidence of economic growth emerges.
In line with this, central bank was less optimistic about growth prospects than earlier in the summer, when a run of firmer data fuelled hopes of a stronger economic recovery.