OECD says ECB had no choice on rates

PARIS (Reuters) - The European Central Bank had no choice but to raise interest rates given the high level of inflation, the head of the Organisation for Economic Cooperation and Development said on Thursday, praising the move.

The ECB raised interest rates for the first time in over a year on Thursday, taking its key interest rates to 4.25 percent from 4 percent. With inflation running at more than double the ECB's medium-term target, ECB President Jean-Claude Trichet reiterated that his objective was price stability.

"I do not think that the central bank really had another choice. I congratulate Mr Trichet and the members of the board for having done that," OECD Secretary-General Angel Gurria told France 24 television in comments due to be broadcast on Friday.

The interview was made available to Reuters before it was broadcast.

"It would have surprised me enormously if Mr Trichet had not announced an increase in the ... rate because the inflation is now above the 4 percent level in the euro area," Gurria said.

In a second interview with France 24 in French, Gurria said he did not believe The ECB's rate rise would have a drastic effect on growth.

"The issue of the crisis or of economic growth does not depend on a quarter of a (percentage) point. It depends on confidence and also on the leadership of key institutions and also (on) political leaders," he said.

"It is a signal to say that in the monetary domain we are still here, we are vigilant, we will not let inflation control the situation," he added.

Asked if the U.S. Federal Reserve should follow the ECB's lead and raise rates, Gurria said the mandates of the two central banks were different, with the ECB focused on price stability and the Fed dealing with various factors.