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The European Central Bank and other policymakers across Europe need to keep interest rates at current elevated levels until they're sure inflation is under control despite sluggish growth, the International Monetary Fund said Wednesday, warning against “premature celebration” as inflation declines from its peak. The Washington-based IMF said that cost of underestimating inflation's persistence could be painfully high and result in another painful round of rate hikes that could rob the economy of a large chunk of growth. The European Central Bank and the other central banks that aren't part of the 20-country eurozone “are reaching the peak of their interest rate cycles, while some have started to reduce policy rates,” the IMF said in its twice-yearly regional economic outlook for Europe.

Israel generalUnited statesAlfred kammerEuropean central bankEurope departmentInternational monetary fundInternational monetary fundInflation declinesInterest ratesSluggish growthRate hikesPremature celebrationGrowth forecastsAlfred kammerCentral banks