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European interest rate setters piled pressure on the continent's most indebted nations after the European Central Bank warned of a rate increase next month that could send Portugal and Ireland closer to bankruptcy. Jean-Claude Trichet, the ECB president, said it was possible base rates on the continent could be raised in April to calm inflation, which he said was causing concern and could move further above the central bank's target. Trichet said the ECB was prepared to act "in a firm and timely manner" to prevent inflation from racing out of control. "Strong vigilance is warranted with a view to containing upside risks to price stability," he said. His remarks stunned currency traders, who said his previously careful remarks had been ditched in favour of a harder line. The euro strengthened on Trichet's comments to just below $1.40. However, the prospect of a rise in rates and a stronger currency put the spotlight on countries already paying high interest rates on their debts and would face a jump in costs should base rates go up. Irish political leaders are trying to persuade the EU that the costs of its bailout are punishing and will prevent it from recovering.