IMF urges UK to do more to drive economic growth

Written on:May 22, 2023
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Plan B required to boost growth in the UK: IMF

The International Monetary Fund in its annual review of the UK’s economic record warned that government should prepare an economic Plan B to prevent the economy from tumbling into recession.

IMF said the Bank of England should consider more quantitative easing (QE) and even cutting interest rates due to continuing economic weakness in the UK. “Growth is too slow and unemployment, including youth unemployment, is too high. Policies to bolster demand before low growth becomes entrenched are needed”, said Christine Lagarde, IMF managing director.

The organisation in the report said that it expects economic growth to resume in the second half of the year after the UK slipped back into recession in the first quarter. It urged government to boost growth by spending on infrastructure projects, which would increase employment and demand within the economy.

“The stresses in the euro area affect the UK through many channels. Growth is too slow and unemployment - including youth unemployment - is too high. Policies to bolster demand before low growth becomes entrenched are needed”, said IMF managing director.

The warning from IMF has pushed the Chancellor George Osborne under pressure. But, in a speech in London today Osborne said he welcomes the annual IMF Article IV assessment of the UK and the IMF could not be clearer today.

Osborne said Britain needs to deal with its debts, and the Government’s fiscal policy is the appropriate one, adding that the schemes to support infrastructure projects and lending to small businesses would be ready over the next few months.


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