Basel, Switzerland: Central banks will need to continue raising interest rates to dampen inflation as global economic expansion continues, the Bank for International Settlements said. It also refers to the current global economic growth as a "golden age."

``Inflationary pressures might turn out to be more significant than anticipated,'''' BIS general manager, Malcolm Knight, told a press conference in Basel yesterday. ``Authorities should continue gradually to normalize the level of policy interest rates'''' as the global economy extends what ``may well go down in history as a `golden age.''''''

The Bank for International Settlements (BIS) is an international organization, which fosters international monetary and financial cooperation and serves as a bank for central banks. The BIS holds currency reserves on behalf of its members, produces research and provides policy makers with a forum for discussion.

The International Monetary Fund forecasts global economic expansion of 4.9 per cent this year after 5.4 per cent growth in 2006. That will mark five consecutive years of growth above 4 per cent, the longest streak since the early 1970s.

The world''s major central banks have raised borrowing costs over the past year to contain inflation, in what many had suspected was a synchronized tightening of monetary policy across regions.

Policy makers are trying to sustain the longest streak of global growth in 30 years, with appropriate monetary checks.

The European Central Bank, the Bank of Japan, the People''s Bank of China and the Bank of England have all indicated that further rate increases may be in the pipeline this year, while economists at Merrill Lynch & Co and Goldman Sachs Group Inc now expect the US Federal Reserve to leave rates at a six-year high rather than cut them.