ECB's Trichet doesn't see negative inflation in '09

FRANKFURT (Reuters) - The European Central Bank does not expect negative inflation in 2009 but much depends on developments in oil and commodity prices, ECB President Jean-Claude Trichet said in an interview with Reuters Television on Thursday.

The ECB cut interestrates by 50 basis points on Thursday, its second such cut in less than a month, and Trichet said the central bank did not exclude a further cut at its next meeting in December, although he would not be drawn on the size.

He said the rate cuts were made possible because of the easing in inflation risks and he expected inflation to fall below the ECB's 2 percent ceiling in the course of 2009.

"Everything depends on the price of oil and commodities, among other elements," Trichet said. "On the basis of the present analysis, taking into account the present level of the price of oil and commodities and on the future markets, we will be in line with our definition of price stability in the course of 2009 with a significant decrease of HICP, but we won't be negative, certainly not."

Given the improved outlook for inflation, financial markets are pricing in a rate cut of 50 basis points at the ECB's next meeting in December, which would take benchmark rates to 2.75 percent. "I will not comment on what the markets are imagining .... We will see," Trichet said.

Asked if the ECB was setting a precedent of cutting rates by 50 basis points, he said: "We are always doing what we judge appropriate .. We are doing up and down what is in line with the realities. And as you know we never precommit to anything."

(Reporting by Krista Hughes and Rachel Armstrong; editing by David Stamp)