European Central Bank governing council member Axel Weber said the bank may have to raise interest rates further to quell inflation and that the euro-region's economy does not need support from borrowing costs. ``I don't believe that interest rates have to support the economy, which is currently growing at 2.5 percent,'' Weber said in an interview in Washington D.C. yesterday. ``Inflation risks have increased recently,'' and the bank will ``have to counter these risks should they materialize.'' Weber said there's a ``reasonable probability that inflation may end up above 2 percent in 2008 and possibly in 2009,'' and ``that is reason enough to examine closely if there is a need to adjust'' interest rates. The bank aims to keep inflation just below 2 percent. The ECB left its benchmark rate at 4 percent on Oct. 4 after shelving a planned increase in September to assess how the U.S. housing slump and rising credit costs will affect the economy. At the same time, inflation breached the 2 percent limit for the first time in more than a year last month and oil prices have soared 75.5 percent since mid-January, passing a record $90 a barrel on Oct. 19. According to Weber, oil costs are likely to ``retreat'' as the recent surge was driven by geopolitical tensions. However, ``futures markets show that over the medium to long term the oil price will hover somewhere between $70 and $80 dollars a barrel. These are still elevated levels and above what we had based our projections on.' http://www.bloomberg.com/apps/news?pid=20601087&sid=anV2SU0k2OsY&refer=home No mercy for USD ! Ha, ha, ha...