The credit crunch is far from over, according to European Central Bank president Jean-Claude Trichet.

He said the world was seeing "an ongoing, very serious market correction" and warned his fellow central bankers they should not rush to cut interest rates, and should instead make containing inflation their first priority.

"Price stability and credibility in price stability in the medium term is the best way to have a high level of sustainable growth and sustainable job creation," he told the BBC.

He pointedly refused to say that the worst of the credit crunch was past: "Since the very beginning I have stuck to my own diagnosis, which I trust was not that bad."

He warned that central banks cannot control spiralling asset prices, which many people view as the initial cause of the subprime crisis and ensuing credit crunch. He said: "We will do all we can to ensure price stability. But we cannot directly target asset pricing. That would probably be something which is impossible and not advisable at all."

Trichet compared recent food and fuel price rises to the 1970s oil crisis, saying "These are challenging times obviously. We have this accumulation of the oil shock, the food and agro-products shock. What we say at this moment is not to embark on what we call second-round effects. In the first oil shock when we took the wrong decision, embarking on what I call second-round effects, we enshrined a high level of inflation. And we created mass unemployment in Europe."

The ECB has kept interest rates in the eurozone steady at 4% as its sees the increasing risk of inflationary pressures even while there are signs of an economic slowdown. Trichet's remarks make it clear that there is little chance of a rate cut in the near future.