The deficit reduction plan favoured by the UK coalition government is the right step to take, according to the IMF’s detailed look at the UK economy, released today.
According to the organisation, the recent difficulties of the economy have been caused by temporary diversions. Low and negative growth, high inflation and poor employment figures prompted the IMF to say: “This raises the question whether it is time to adjust macroeconomic policies. The answer is no, as the deviations are largely temporary.”
However, the report does say that the debt plans “will create headwinds for short-term growth” and that “there are significant risks to inflation, growth, and unemployment.”
The IMF also put the UK recovery at the heart of the global revival: “The stability and efficiency of the UK financial system is a global public good due to potential spillovers and thus requires the highest quality of supervision and regulation.”
Click here to read the IMF statement in full