IMF: We are closely following the latest economic developments in the UK

‘Pound Sterling’ from the IMF

The International Monetary Fund (IMF) stated that they are closely following the latest economic developments in the UK and are working with the authorities, and that they do not recommend large and non-targeted fiscal packages, given high inflation.

After the British government announced a £45 billion tax cut package, the IMF made a statement.

“We are closely monitoring the latest economic developments in the UK and are working with the authorities,” an IMF spokesperson said in a statement. expression was used.

WARNING “IT WILL INCREASE INEQUALITY”

In the statement, it was understood that the big financial package announced in the country was aimed at helping families and businesses cope with the energy shock, increasing growth through tax cuts and supply measures, but it was emphasized that it was important that the fiscal policy did not operate for purposes contrary to the monetary policy.

“Given the pressure of high inflation in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this point,” the statement said. evaluation was made.

The 23 November budget will provide an opportunity for the British government to consider ways to provide more targeted support and to reconsider tax measures that particularly benefit high income earners.

HISTORICAL DECREASE IN STERL

British Finance Minister Kwasi Kwarteng announced last Friday that the country is preparing for the implementation of tax cuts, which will total 45 billion pounds.

This situation caused the sterling to lose strength by increasing the expectations that the country’s external debt would increase. The British pound hit an all-time low of 1.0350 in Asian markets yesterday.

On the other hand, the Bank of England (BoE) increased the policy rate by 50 basis points to 2.25% last week, against the inflation that was at the highest level in 40 years in the country.

BoE Chief Economist Huw Pill said today that the government’s planned tax cuts are likely to result in the bank’s substantial monetary policy response.