Eurozone countries were put on alert on Thursday that interest rates were likely to rise next month in the most dramatic policy response so far to global inflation caused by high oil and food prices.

In a surprise move, the European Central Bank signalled it was preparing for a July quarter percentage point increase in its main interest rate, which has stood at 4 per cent for a year. The ECB was “in a state of heightened alertness”, said Jean-Claude Trichet, its president. However, he described an increase in borrowing costs as “possible” rather than a certainty.