FRANKFURT, Germany - European Central Bank president Jean-Claude Trichet has underlined the ECB's expectations that inflation will settle back to its target level in about 18 months and that the euro zone economy will return to moderate growth late this year.

"Our base-line scenario is that we will have a trough in the profile of growth in the euro area in the second and third quarters of this year and, following this, a progressive return to ongoing moderate growth," Trichet said in an interview posted on the ECB website.

He stressed the bank's commitment to its main aim of fighting inflation, which has hit record levels this year as fuel, food and housing costs rise.

European Union statistics show inflation in the 15-nation euro zone hit four per cent in June - the highest level since records started 16 years ago, and double the ECB's target of two per cent.

"We are there to tell households as well as enterprises, all social partners, that we will maintain price stability less than two per cent, close to two per cent, in the medium term," Trichet said.

"Today, price setters and social partners must take into account that we will be back to price stability - in line with our definition - say over 18 months."

Earlier this month, the ECB raised its benchmark interest rate from four per cent to 4.25 per cent, but left open where rates will go next.

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