Paris ? The European Central Bank, sticking to its tough line on inflation, raised its key interest rate by a quarter of a percentage point to 3.25 percent on Thursday and hinted that another rate increase is in the offing before next year.

The move likely will mean higher borrowing costs on auto loans and mortgages in the 12 nations that use the euro, as ECB President Jean-Claude Trichet said he expects the region’s economy to continue growing through the rest of this year and into next.

“Conditions remain in place for the euro-area economy to grow at solid rates,” Trichet said, while cautioning of some volatility around the turn of the year. “Global activity has become more balanced … and robust.”

Trichet also said the bank would “monitor very closely” inflationary pressures, a phrase he has used after previous rate increases and a signal that another rate increase could be likely in December. The ECB has not raised rates at consecutive meetings since it began tightening monetary policy last December.