July 5 (Bloomberg) -- European Central Bank President Jean- Claude Trichet signaled policy makers are preparing to raise interest rates again as soon as September after leaving them at a six-year high today.

The ECB has ``no intention to change in any respect the present expectations of the market'' for another rate increase in September or October, Trichet said at a press conference in Frankfurt today. Borrowing costs are still low enough to boost economic growth, and ``acting in a firm and timely manner to ensure price stability in the medium run remains warranted.''

The ECB increased rates eight times since late 2005 as the fastest economic expansion in six years gave companies room to raise prices and encouraged workers to demand more pay. Economists expect the bank to raise its benchmark for a ninth time in September, a Bloomberg survey shows, and some investors are betting on a 10th quarter-point step by December.

``The writing is on the wall for higher rates,'' said David Brown, chief European economist at Bear Stearns International in London. ``The ECB remains poised, ready and waiting to unleash the next round of tightening.''

Rising Rates

Central banks around the world are raising rates to tackle the threat of accelerating inflation. The Bank of England today increased its benchmark rate by a quarter-point to 5.75 percent, also a six-year high, and Iceland's central bank kept its key rate unchanged at a record 13.3 percent. Bucking the trend, Indonesia's central bank cut its benchmark for the 13th time since May 2006.

The U.S. Federal Reserve has kept its benchmark rate at 5.25 percent for a year as economic growth slowed. The Fed said June 28 that inflation is still the ``predominant'' risk facing the world's largest economy.

Investors increased bets on higher borrowing costs in Europe after Trichet's comments today, pushing the implied rate on the three-month Euribor futures contract for December settlement up 3 basis points to 4.59 percent. The contracts settle to the three- month inter-bank offered rate for the euro, which has averaged 16 basis points more than the ECB's benchmark rate since the single currency's start in 1999.

The euro-region economy will expand about 2.6 percent this year, the ECB forecast last month, close to last year's 2.7 percent expansion, which was the fastest since 2000. Inflation may average around 2 percent this year and next, the forecasts show. The bank aims to keep inflation just below 2 percent.

`Upside' Risks

``Risks to price stability remain on the upside,'' with high capacity utilization and faster hiring threatening to fuel wage increases, Trichet said. While euro-region inflation has held below 2 percent for 10 straight months, it is likely to rise ``significantly'' toward the end of the year, Trichet said.

Some workers have already used record-low unemployment in the euro region to push through pay claims. Germany's IG Metall, the country's largest union, on May 4 won a 4.1 percent raise for 800,000 workers in the metals industry. German railway workers went on strike this week in pursuit of a 7 percent pay increase.

Money-supply growth, which the ECB uses to gauge future inflation, unexpectedly accelerated to 10.7 percent in May, close to the fastest pace in 24 years. Adding to the bank's concerns, crude oil prices have gained 41 percent since mid-January, trading at $71.70 a barrel today.

`Hawkish Tone'

``Trichet de facto pre-announced a rate hike, probably for September,'' said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. ``The unchanged hawkish tone of the statement supports our view that the ECB will raise rates a second time in December.''

To be sure, not all of the ECB's 19 governing council members have expressed concern that inflation will accelerate. Portugal's Vitor Constancio said June 24 that an increase in bond yields reflected confidence in the growth outlook ``and not so much fears of inflation in the future.''

France's Christian Noyer said in May there was no cause for concern about inflation in the euro region and predictions that interest rates would rise further after June were premature.

Policy makers now go into the summer recess and meet via teleconference in August, which is usually not followed by a press briefing.

Trichet today refused to rule out calling a press conference next month and said the bank can signal a move in borrowing costs any time. ``If I have a message on behalf of the governing council to ship on you, I will ship it on you without any difficulties.''

To contact the reporters on this story: Simone Meier in Frankfurt at smeier@bloomberg.net; Gabi Thesing in Frankfurt at gthesing@bloomberg.net.

Last Updated: July 5, 2007 11:43 EDT