Householders face another increase in homeloan repayments after the European Central Bank (ECB) raised interest rates by 0.25 percentage points to 2.5 per cent today.
The new rate is the highest level in almost three years, and the widely expected 0.25 percentage point rate hike is the second ECB credit tightening in three months.
The latest increase will mean a rise of about €40 a month for homeowners with a typical mortgage of €300,000.
Mr Trichet told the European Parliament last week that markets were "perfectly sensible" in pricing in higher rates.
German data showed retail sales shot up in January in the euro zone's largest economy, providing some long-awaited evidence that consumer spending may be reviving.
The country's Ifo index touched a 14-year high in February, and similar French and Belgian indices rose too.
Mr Trichet said today that the ECB is ready to tighten credit further at any time to counter these inflationary dangers, drawing protests from business leaders and politicians as well as triggering a tumble in bond markets.
"This decision reflects upside risks to price stability," Mr Trichet said in a policy statement after the increase. "Interest rates across the entire maturity spectrum still remain at very low levels in both nominal and real terms, and our monetary policy remains accommodative."
He revealed the Governing Council discussed options including a 50 basis point (half percentage point) rise, something it has done only twice in its history and not since June 2000.
"We did assess...pros and cons associated with various possibilities, zero increase, 25 and 50 (Bps). We were unanimous to consider that 25 was the appropriate decision to take today." The ECB also said it lifted rates on its marginal lending facility, used in emergencies by banks short of overnight cash, to 3.5 per cent, and its deposit facility, which accepts excess cash from the market, to 1.5 per cent.