IMF Says Closely Monitoring Recent Economic Developments In UK, Engaged With Authorities

The International Monetary Fund (IMF) is closely following reports about concerning economic developments in the British economy and currently engaged with UK authorities about the matter, an IMF spokesperson said in a statement to Sputnik on Tuesday

WASHINGTON (UrduPoint News / Sputnik - 28th September, 2022) The International Monetary Fund (IMF) is closely following reports about concerning economic developments in the British economy and currently engaged with UK authorities about the matter, an IMF spokesperson said in a statement to Sputnik on Tuesday.

On Monday, the British pound fell to an all-time low of $1.0384 against the US Dollar in light of UK Prime Minister Liz Truss's tax-cutting plans. .

"We are closely monitoring recent economic developments in the UK and are engaged with the authorities," the spokespersons said.

On Friday, UK Chancellor of the Exchequer Kwazi Kwarteng announced a 45 billion pound ($48 billion) tax-cutting package that would benefit the highest earners most, causing concern about unsustainable government borrowing.

It was the biggest package of tax cuts in 50 years announced "without even a semblance of an effort to make the public finance numbers add up," Institute for Fiscal Studies Director Paul Johnson said in comments on the measure.

The IMF does not recommend large and untargeted fiscal packages at this moment given elevated inflation pressures in many countries, including the United Kingdom, the spokesperson said.

The IMF spokesperson added that the UK measures will likely increase inequality in the country.

The UK government should consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high income earners, the spokesperson said.