European Central Bank President Jean- Claude Trichet arrives in Dublin today to signal he'll increase interest rates to a six-year high, putting the brakes on Ireland's property boom.

Trichet will probably flag the bank's intention to raise its benchmark rate in June to 4 percent, according to all 22 economists who responded to a Bloomberg News survey. The announcement would come after tomorrow's meeting of the ECB's governing council, which will likely hold the rate for now at 3.75 percent. The bank had kept the rate at 2 percent -- the lowest in six decades -- from June 2003 to December 2005.

``The 2 percent rates gave a stimulus to household cash flow in Ireland and Spain, which in turn fed the property market,'' said Julian Callow, chief European economist at Barclays Capital in London. ``Now, this process has gone into reverse, and these markets are feeling the biggest impact.''

Slower growth in the euro region's two most successful economies risks hampering the fastest expansion since 2000 among the 13 nations that use the currency. Trichet hails Ireland as a model of success, and Spain last year accounted for almost a third of all new jobs in the euro area.

Since 1996, growth averaged 7 percent a year in Ireland and 4 percent in Spain, compared with 2.2 percent in the euro region. On May 7, the European Commission predicted economic growth in 2008 will slow to 4 percent in Ireland and 3.4 percent in Spain. The euro economy will expand 2.5 percent next year after rising 2.6 percent in 2007, the commission said.

``Spain and Ireland are at the sharp end as rates rise,'' said Klaus Baader, chief European economist at Merrill Lynch & Co. in London. ``Both economies are likely to slow more next year than other economies in the region.''

Some banks predict the ECB, whose 19-member council meets twice a year outside of Frankfurt, may continue to increase rates to keep inflation below its 2 percent ceiling.

Dusseldorf-based WestLB, Germany's third-largest state- owned bank, raised its estimate last month for the ECB rate to 4.25 percent from a previously anticipated 4 percent. UniCredit MIB in Milan, a unit of Italy's biggest bank, said in March that the rate would peak at 4.5 percent this year.

Trichet said on April 12 the property market is still ``strong'' even after a ``slowing increase in house prices in some regions. Monetary developments therefore continue to require very careful monitoring, particularly against the background of a solid expansion in economic activity and continued strong property-market developments in many parts of the euro area.''

Home prices in Ireland and Spain surged in the past 10 years as borrowing costs plunged and construction helped fire economic growth. Now that's changing. House-price inflation in Spain dropped to 7.2 percent in March, a nine-year low. On April 24, the country's benchmark IBEX 35-stock index fell as much as 3.1 percent on concern that the property boom was imploding. The index has since lost another 1.7 percent.

In Ireland, the cost of a home has fallen for the first time in more than five years, slipping 0.6 percent in March from the month before, Dublin-based mortgage lender Irish Life & Permanent Plc said April 27.

In the western Dublin suburb of Tyrellstown, TwinLite Developments is offering to pay the first six months of mortgage payments up to 1,200 euros on new houses, which sell for between 299,950 euros ($407,000) and 510,000 euros. TwinLite will also throw in a set of Whirlpool Corp. kitchen appliances for free. ``These things are incentives to aid the first-time buyer,'' said Sandra Farrell at McPeake Auctioneers, which is handling the sale.

This is a long way from the glory days of the property boom in both countries. Irish house prices climbed 335 percent from 1995 to 2005, the most among 18 countries surveyed by the Organization for Economic Cooperation and Development. Prices in Spain rose 169 percent during the same period, while in Germany, Europe's largest economy, the cost of homes stagnated.

Factors outside the ECB's control have contributed to the slowdown. In Ireland, some people are waiting for the outcome of this month's national election before bidding for property because of speculation that stamp duty, a tax of as much as 9 percent on homebuyers, may be cut.

Nor is Trichet confronted by the same problems facing Federal Reserve Chairman Ben Bernanke in the U.S., where a drop in prices threatens to complicate Bernanke's efforts to curb inflation.

``In the last Fed statement, they said that risks to growth and inflation have risen, so they are facing a dilemma,'' said Jacques Cailloux, an economist at Royal Bank of Scotland Group Plc in London. ``It's simpler for the ECB, but not simple.''