(BRUSSELS) - The European Central Bank faces a growing bind over keeping a lid on price pressures as the economy slows, economists said Wednesday amid mounting evidence of weak economic confidence and surging inflation.

"The ECB is facing a massive juxtaposition on rates," Bear Stearns economist David Brown said.

"Rising eurozone inflation suggests the need for higher rates, while plummeting economic confidence highlights the need for lower rates ahead," he added.

Adding to signs a recovery is losing pace, confidence in the European economy worsened more than expected in October, according to a widely watched European Commission survey released Friday.

The survey adds to growing evidence that a surging euro, record oil and other commodity prices and tight credit conditions after recent financial market turbulence are sapping the vigour of the eurozone economy.

"The triple whammy is taking its toll," said Bank of America economist Holger Schmieding.

"The spike in oil and food prices, mounting global uncertainties in the wake of the US subprime crisis and the surge of the euro to ever new record highs have put an end to Europe's Goldilocks scenario of nice growth at low inflation," he added.

The euro hit a record high of just below 1.45 dollars on Wednesday while oil prices rose on Monday to a record high 93.80 dollars a barrel on Monday.

Surging energy prices are putting pressure on eurozone inflation, which surged to 2.6 percent in October, according to a first estimate from the EU's Eurostat data agency on Wednesday.

The rate, the highest since September 2005, exceeded economists' forecasts for 2.3 percent and was well above the ECB's preferred level of close to but less than 2.0 percent.

Eager to keep inflation under control, the ECB has raised eurozone borrowing costs a total of eight times since December 2005, each time by a quarter of a percentage point.

Governing board member Axel Weber warned on Tuesday that should inflation surge higher, "we will do whatever necessary to ensure medium term price stability, as our mandate calls for."

"Risks remain oriented higher for eurozone price stability in the short and medium term," said Weber, who is also president of the German central bank or Bundesbank.

He has rung alarms several times in recent weeks to call attention to rising inflation and is known as one of the chief ECB "hawks," or directors that give a higher priority to fighting rising prices than to boosting the 13-nation eurozone economy.

Bank of America's Schmieding said that the inflation jump in September would strengthen the argument for raising interest rates despite the weakening economy.

"For the ECB, higher inflation amid a loss in economic momentum is the worst possible combination of data," Schmieding said. "Judging by their public comments, the hawks around Weber are likely to argue for a December rate hike."

Capital Economics analyst Jonathan Loynes said the bind facing the ECB left the outlook for its next interest rate move open.

"The latest batch of data on the eurozone will further heighten the dilemma for the ECB posed by rising price pressures alongside weakening activity," he said.

"With the ECB likely to put most emphasis on the former, the door to a final interest rate hike in this cycle remains open," he added.

The ECB next meets on November 8 to mull changes to its key interest rate, which currently stands at 4.0 percent.

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