Imf relaxed over inflation woe

Eurozone inflation is at 'uncomfortable' levels, but there's no need to worry, claims the IMF…

In its latest report, the International Monetary Fund (IMF) argued that Eurozone interest rates ‘should not fall because inflation is at ‘uncomfortably high levels’. The IMF predicts that the rate would fall below 2% late next year without a rate rise.

The IMF also revised its forecast for eurozone growth this year upwards from 1.4% to 1.75%. The report stated: "In these circumstances, it is appropriate to keep policy rates on hold”.

Eurozone inflation was 3.6% in May, well above the European Central Bank's (ECB) target rate of about 2%.