Europe's finance ministers yesterday delivered a last-ditch plea to the European Central Bank (ECB) not to raise interest rates, amid fresh international criticism of the bank's hawkish stance.

Jean-Claude Juncker, Luxembourg's prime minister, claimed that inflation was under control and warned the bank that a rate rise could hit growth in the 12-country euro zone.

Simultaneously, the Organisation for Economic Co-operation and Development (OECD) said it believed a rate rise was premature.

Euro-zone interest rates should stay on hold until September or October 2006, when economic recovery is more sure-footed, and then rise step-by-step, OECD chief economist Jean-Philippe Cotis said.

"It's worth waiting a little bit," Mr Cotis said.

"We would raise rates next autumn," he said, arguing that inflation in the 12-nation currency area was well under control despite a surge in oil prices, and was likely to remain so.

The OECD also published its yearly report on its member states' economies.

The Paris-based organisation predicted that the Irish economy would expand at a steady 5 per cent in 2006 and 2007, driven by robust income growth and higher Government spending.

A key risk to the outlook was the possibility of an abrupt adjustment to residential construction activity as the rate of price inflation in the Republic's booming property market cooled off and the macroeconomic impact would be greater if house prices were to fall, it warned.

The ECB is expected tomorrow to risk a backlash by raising rates by a quarter percentage point to 2.25 per cent, the first rise in five years.

Mr Juncker, who used to insist he would not comment on interest rate policy, was instructed by colleagues to launch a political counter-attack at this month's euro group meeting. - (Financial Times service, Reuters)