FRANKFURT (Reuters) - European Central Bank (ECB) policymakers presented a united front on interest rates yesterday, a month after rocking financial markets with a three-way split on the future policy path.

ECB President Jean-Claude Trichet said the decision to raise rates by 25 basis points to 4.25 percent was unanimous - a sharp reverse from the previous month's division.

In contrast to the June meeting, Mr. Trichet was also careful to give markets no reason to run away with expectations for a series of aggressive hikes, saying the ECB had "no bias" although it would do whatever was needed to tackle inflation.

Analysts said the unanimity likely reflected a compromise between the tough anti-inflation fighters on the 21-member Governing Council and those concerned about growth, but was also a deliberate step to calm jittery investors.

"Having sent rates markets into a tailspin four weeks ago, the ECB today undid some of the damage," Bank of America economist Holger Schmieding said.

At the June meeting, observers were shocked almost as much by Mr. Trichet's admission of a split on the Council as they were by his blunt hint that a July rate hike was on the cards.

In June, after discussing new staff economic projections showing rising inflation and slowing growth, Mr. Trichet said some policymakers had wanted to raise rates immediately, some later and some not at all - an unusual state of affairs for a body which prides itself on making consensus decisions and not resorting to a show of hands.

The perception of conflict deepened over the last month when some policymakers said one hike should be enough to control inflation, some said further tightening could not be ruled out and some were lukewarm on any change from four percent.

Yesterday, Mr. Trichet was able to report that the players on his team - which has grown from the original 11 to 15, not including the six Frankfurt-based board members - were finally all running in the same direction.

"We were unanimous, taking into account all the information we had," he told reporters at his monthly news conference.

Mr. Trichet, who regularly stresses that he is the only person to speak for the whole Governing Council, sidestepped questions about whether policymakers had considered raising rates by a larger 50 basis points or leaving them on hold.

Markets responded to the "no bias" stance by rowing back on expectations that the ECB will push ahead with another rate rise to 4.5 percent in the near future - a move which could harm already flagging growth in countries like Spain and Italy.

"It's clearly a compromise within the Council," UniCredit economist Aurelio Maccario said.

"The doves have agreed on the unanimous decision (Mr. Trichet needed it after all the critiques of this month) but they got the on hold for a while."

Rate rise hold-outs may also have been convinced of the need for a hike by figures in the last month showing inflation spiked to a new high of four percent, wages rose strongly in the first quarter and inflation expectations rising further.

Although Mr. Trichet repeated the ECB's strong determination to keep inflation expectations stable and head off a wage-price spiral, he also dropped the tough language which helped unsettle markets last month and price as many as three hikes this year.

The statement read out at the news conference contained no reference to "firm and timely action" or "heightened alertness" - the phrase which analysts speculated was designed to replace "vigilance" as the ECB's signal for an imminent rate rise.

Although the ECB regularly signalled rate moves one month in advance during the steady tightening cycle between December 2005 and June 2007, some policymakers including Germany's Axel Weber have said that code words have outlived their use-by date.

Mr. Trichet promised that the ECB would continue to clearly communicate its rate moves to markets, but did not commit to any particular form of words.

"The fact that we have not mentioned heightened alertness or strong vigilance doesn't mean anything," Mr. Trichet said.

"If and when we have something new to give to the market we will certainly do that, as we always did in the past...in a clear fashion that will permit us to be as predictable in the future as we have been in the past."