* Euro zone CPI stays well above ECB's target in June * ECB's Trichet uses "strong vigilance" signal again * ECB meets next week to decide on interest rates By Jan Strupczewski BRUSSELS, June 30 (Reuters) - The European Central Bank signalled it would raise interest rates again next week as data on Thursday showed inflation in June stabilised well above the bank's target. The European Union's statistics office said consumer prices in the 17 countries using the euro were 2.7 percent higher in June than a year earlier, the same as in May. Economists polled by Reuters had forecast a figure of 2.8 percent. The ECB aims to keep inflation below but close to 2 percent and raised its refinancing interest rate in April by 25 basis point to 1.25 percent to curb price growth -- its first hike in two years. "It is of paramount importance that the current rise in inflation does not give rise to broad-based inflationary pressure," ECB President Jean-Claude Trichet told the European Parliament's economic and monetary affairs committee just before the figures were released. "The current monetary policy is accommodative and ... as I said we are in a state of strong vigilance," he said. The phrase "strong vigilance" has regularly been deployed to signal a rate hike at the next meeting, including before April's move. The ECB meets on interest rates next Thursday. The euro hit a fresh three-week high against the dollar in response. It also remained supported as Greece moved a step closer to securing international aid after voting in favour of austerity measures. "There are signs that euro zone price pressures are starting to ease, although much will clearly depend on oil price developments," said Howard Archer, economist at IHS Global Insight. "Slowing euro zone growth after the first-quarter spike up and still relatively high unemployment are likely to put a brake on underlying inflationary pressures," he said, noting that the euro zone business and consumer confidence survey for June had showed consumers' inflation expectations waning for a second successive month. Other European data on Thursday painted a mixed picture. Euro zone money supply growth accelerated in May, while growth of loans to the private sector in the euro zone rose. Unemployment in Germany -- Europe's largest economy -- fell less than expected and German retail sales dropped at their fastest rate in four years in May, though economists said an E.coli outbreak that led to a fall in food sales was a major factor. "Is there a consumption conundrum in Germany?" pondered Carsten Brzeski at ING. "This morning's German data again illustrated the German economy's main dilemma: while the labour market remains the show case of the recovery, private consumption is only slowly getting off the ground." JULY RISE NEAR CERTAIN, MORE DOUBT FURTHER OUT Nonetheless, Trichet's use of the "strong vigilance" phrase to signal a rate rise scotched market speculation that the bank could delay another increase in borrowing costs because of the debt crisis in Greece and the contagion threat it poses to other euro zone countries. Michael Schubert at Commerzbank said the money supply figures, at least, should not stop the ECB acting next week. "In its last monthly report, it determined that a further reduction in excess liquidity is necessary to counteract price pressures in the euro area," he said. But economists said Greece's problems and their potential impact on the euro zone could still make the bank delay the next interest rate rise, which economists expect will happen later this year, taking the refinancing rate to 1.75 percent. "Slowing euro zone growth, evidence that underlying inflationary pressures remain moderate and still serious concerns over the Greek situation suggest that the ECB could hold off from acting for some time to come after the signalled July interest rate hike," Archer said. (Reporting by Jan Strupczewski, additional reporting by Paul Carrel in Frankfurt, editing by Rex Merrifield/Mike Peacock)

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