IMF's Rato sees need for euro rate increase

Rodrigo Rato, head of the International Monetary Fund, on Tuesday 7 November warned that further European interest rate rises would be needed to keep inflation under control as the economic recovery continues.

Rato told EU finance ministers in Brussels that their reforms - particularly to the labour market - had made an "important" contribution to recovery in a region where growth is expected to reach 2.8 per cent this year.

Speaking at a breakfast with journalists, Mr Rato said: "In the euro a