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FRANKFURT -- Both the European Central Bank and the Bank of England raised interest rates, strengthening a global trend and signaling that European monetary authorities are more concerned about rising inflation than about the prospect of Europe's recovery faltering.

While the ECB's decision to raise rates by a quarter point to 3% was expected, the Bank of England's quarter-point move to 4.75% was a surprise. European shares fell on the news, with the U.K.'s FTSE 100 index closing down 1.6%.

ECB President Jean-Claude Trichet said the central bank, which sets monetary policy for the countries that use the euro, will continue to monitor inflation risks "very closely." Economists interpret the phrase as a sign the bank will accelerate the pace of its rate increases, and they expect another quarter-point push as soon as October. Most observers believe interest rates will hit 3.5% by the end of the year, despite signs that recent growth in the euro zone may reach a plateau by then.

"If our assumptions and baseline scenario are confirmed, a progressive withdrawal of monetary accommodation will be warranted," said Mr. Trichet. He noted the uncertainty caused by geopolitical tensions, plus strong credit growth in the euro zone, present risks that prices will keep rising.

Prompted by strong growth and its expectation that inflation will remain above the bank's 2% target, the Bank of England's move brings the U.K.'s monetary policy in line with the global tendency toward higher rates. In the past month alone, 15 central banks around the world have increased the cost of borrowing. The Reserve Bank of Australia has increased rates to 6%, and policy makers at the Bank of Japan have signaled rates there will continue rising, though bets remain split on whether the U.S. Federal Reserve will pause in its rate-raising campaign when it meets Tuesday.

"We've now seen excess liquidity being withdrawn from all the key central banks," said Matthew Sharratt, an economist with Bank of America.

Even as the ECB prepares to quicken the pace of tightening, economists speculate that by next year, it could find itself in a classic central-bank bind. "There's a real risk that the ECB finds itself with core inflation increasing and growth underperforming," said Dominic Bryant of BNP Paribas.

Euro-zone inflation data continue to come in strong. July's headline inflation figure remained 2.5%, far above the bank's preferred range of "below, but close to" 2%. Mr. Trichet cited oil prices and their potential pass-through as price risks, but core inflation -- with volatile food and energy prices excluded -- also is creeping up. Consumer-price expectations last month in the euro zone remained at the highest level in more than four years. Higher raw-material prices are driving up manufacturing costs, which businesses have begun passing to consumers.

Meanwhile, data strengthening the case for the euro zone's recovery are trickling in. Unemployment fell to a record low 7.8% in June, and retail-sales numbers show a 0.5% uptick in the second quarter.

The International Monetary Fund has raised its projection for 2006 euro-zone growth slightly to 2.1%. Second-quarter figures for growth in gross domestic product, due in mid-August, are expected to show further acceleration.

But survey results are spotty, which suggests the currency bloc could be peaking. Euro-area business confidence rose further in July, but closely watched business-activity indexes, including the euro-zone service-sector survey and Germany's Ifo index, slipped.

"Everything's looking good in the euro zone at the moment, but there are some quite worrying clouds on the horizon," said Howard Archer, economist with Global Insight.