ECB chief warns on rising inflation

The European Central Bank (ECB) ratcheted up its rhetoric on inflation concerns in the euro zone. The ECB kept interest rates on hold at a record low of 1% but warned that the euro zone faces short-term price pressures - taken by some in financial markets as a sign it could raise rates earlier than previously thought. Citigroup said it had brought forward its expectation of an interest rate increase from the ECB into this year, following the latest hawkish-sounding remarks from ECB President Jean-Claude Trichet. Trichet sounded a warning on euro-zone inflation. He said inflation risks - although currently "broadly balanced" -could pick up going forward, noting that the ECB won't hesitate to hike rates if those risks materialize and, in turn, drive up prices and wages across the board. Meanwhile, rising fuel prices helped push annual eurozone inflation up to 2.2% in December, from 1.9% in November, according to official figures. Consumer prices in countries using the euro climbed 0.6% on a monthly basis, Eurostat added. The ECB has a target of 2% for eurozone inflation. A year ago it stood at 0.9%.