March 6 (Bloomberg) -- European Central Bank President Jean- Claude Trichet said policy makers are focused on keeping expectations about future price increases in check.

``The firm anchoring of medium- to long-term inflation expectations is of the highest priority to the Governing Council,'' Trichet said at a press conference in Frankfurt today after the ECB kept its key rate at 4 percent. ``The current monetary policy stance will contribute to achieving'' this goal.

Record oil prices, higher credit costs and the euro's 17 percent gain against the dollar in the past year are slowing economic growth in the 15-nation euro region. At the same time, inflation is running at 3.2 percent, the fastest pace since the euro's debut in 1999.

``Uncertainty resulting from financial turmoil remains high,'' Trichet said. ``The economic fundamentals are sound. We emphasize that maintaining price stability over the medium term is our prime objective.''

The 21-member rate-setting council was unanimous in leaving interest rates unchanged today, Trichet told reporters. When asked if investors' expectations for lower interest rates were misplaced, he said: ``We're not underwriting the present future- market interest rates.''

The ECB today revised up its inflation forecasts to 2.9 percent from 2.5 percent for 2008 and said inflation will stay above the 2 percent ceiling in 2009, Trichet said.

The bank also cut its predictions for growth to 1.7 percent for this year and 1.8 percent for 2009, compared with a December forecast of 2 percent and 2.1 percent.

To contact the reporter on this story: Brian Swint in Frankfurt bswint@bloomberg.net.

Last Updated: March 6, 2008 09:16 EST