IMF to trim global growth forecasts By Ben McLannahan July 6, 2012 -- Updated 1300 GMT (2100 HKT) International Monetary Fund chief Christine Lagarde, pictured here on July 6, 2012, said its growth forecast would be "tilted to the downside." IMF managing director has said it will trim its forecast for global growth this year Christine Lagarde did not disclose the size of the planned adjustment She also expressed hope for more interbank lending Economists are expecting the US economy to have added more jobs in June than May Tokyo (Financial Times) -- The International Monetary Fund will trim its forecast for global growth this year, managing director Christine Lagarde said on Friday. Without disclosing the size of the planned adjustment, Ms Lagarde, speaking in Tokyo, said that the IMF's current growth forecast of 3.5 per cent, due to be updated in the middle of July, would be "tilted to the downside." "It is not an enormous variation, but it will be negative," she said. Ms Lagarde pointed to near-simultaneous interest rate cuts in China and Europe on Thursday, along with the Bank of England's boost to an asset purchase programme, as evidence of the fragility of the global recovery. However, she expressed hope that the European Central Bank's action on deposit rates in particular -- cutting the interest rate on its overnight facility to zero -- could help to "stimulate interbank lending, which has not been as active as it should be." The IMF's more cautious stance reflects the fears of central banks in Europe and Asia that loosened monetary policy to try to tackle sluggish global growth. The Bank of England's decision to pump another £50bn into the ailing British economy, already in a shallow double-dip recession, showed its concern about the chilling effect of the eurozone crisis. But this blast of central bank easing appears to have only succeeded in stoking fears about waning global growth ahead of another piece of crucial economic data, the US jobs report. Economists are expecting the US economy to have added more jobs in June than May. Hopes were raised that the US labour market may be regaining some traction after a dispiriting slump following better than expected private sector jobs data released on Thursday. An upturn in the US labour market could dissuade the Federal Reserve from taking more aggressive action to ease monetary policy through a new round of asset purchases. It is also likely to bolster President Barack Obama's position heading into the heat of his re-election campaign. Markets were quiet on Friday ahead of the release of the US employment report. But concerns remained about debt levels in the eurozone, with yields on Spanish 10-year bonds once again near 7 per cent -- a level seen as unsustainable -- and Italian yields close to 6 per cent. The rise in yields on Spanish and Italian government debt made since last week's summit have now been given up. Ms Lagarde also paid tribute to the fiscal consolidation efforts of Japanese prime minister Yoshihiko Noda, who has succeeded in passing a bill to raise the country's consumption tax in two stages, from 5 per cent to 10 per cent, by 2015. "The IMF has always supported this measure," she said. A reasonable rate of taxation applied to a very large base is a good, solid way to address fiscal consolidation needs. On the yen, Ms Lagarde expressed cautious support for direct government intervention to address a "moderately overvalued" currency. "To the extent that macro-prudential measures have been exhausted, intervention is justifiable," she said.