The president of the European Central Bank, Jean-Claude Trichet has warned of rising inflationary pressure in the euro-zone. He has also signaled that the bank could raise interest rates next month for the first time, since the worst period of financial crisis in 2008.

An inflation warning by European Central Bank head Jean-Claude Trichet has seen the euro make its largest one day movement in four years.

The euro soared after Trichet said the ECB is looking to step up its anti-inflation measures.

Jean-Claude Trichet, President of the European Central Bank, said, "It is essential that the recent rise in inflation does not give rise to broad based Inflationary pressures over the medium term. Strong vigilance is warranted with a view to containing upside risks to price stability. We are in a posture of strong vigilance and my understanding of the position of the Governing Council in line with such assessment that we did in the past is that an increase of interest rates in in next meeting is possible."

For now, the ECB has left interest rates at a record-low one percent for the 10th month.

There's a suggestion the ECB may also pull back on the financial support it has offered weak EU member states.

The expectation of an imminent rate rise contradicts a Reuters poll of economists last month which showed they expect the ECB to hold off until October, when Trichet is due to step down from the presidency roll.

EU leaders will attend a summit at the end of the month in Portugal, where they must hammer out a way to tackle the region's sovereign debt crisis, or see markets turn negative on the bloc's peripheral countries.

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