FRANKFURT (Reuters) — The European Central Bank raised its key interest rate to a new five-year high of 3.75 percent yesterday and signalled no immediate end to rate increases in the euro zone.ECB President Jean-Claude Trichet told a news conference that while rates now are moderate, monetary conditions still support economic growth in the region and the Governing Council is ready to squelch inflationary pressures.

“Our monetary policy continues to be on the accommodative side, with the key ECB interest rates moderate, money and credit growth vigorous, and liquidity in the euro area ample by all plausible measures,” Trichet said.

European government debt slipped on these comments, with Euribor futures pricing in a greater chance that ECB rates would continue climbing this year.

“If I was preparing the market for us being restrictive, I would have said that. I did not say that,” he said. At the same time, he left the door open to further rate increases. “I did not say we were at a peak, full stop.”

Market analysts said this language, combined with new projections for strong growth and inflation to climb again next year, suggest that ECB rates are heading to 4.0 percent and possibly higher.