ECB and BOE should tread carefully with rate hikes, IMF says

While telling them to tread carefully, the IMF also warned the European Central Bank in particular should keep raising rates

The European Central Bank (ECB) in Frankfurt am Main, western Germany. Picture: Daniel Roland/AFP via Getty Images

Europe’s central banks should be wary of potential dangers ranging from more financial stress to a divergence in bond yields as they stay the course with further interest-rate hikes, according to the International Monetary Fund.

Inflation risks put the onus on officials to keep tightening, the Washington-based lender said in a report on Friday. Even so, they’ll need to stay nimble in case more tensions emerge similar to the recent turmoil originating in the US that ended up crippling Credit Suisse Group AG.