Tonight the International Monetary Fund has weighed in on the UK’s mini-Budget, offering a direct rebuke of Liz Truss and Kwasi Kwarteng’s tax cuts.
‘We are closely monitoring recent economic developments in the UK and are engaged with the authorities,’ its spokesperson said, in reference to the fluctuating pound and rising borrowing costs. ‘Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture’ – suggesting some concern that the measures could be inflationary.
The IMF seems more frustrated with the ethics of the policies rather than their economic impact
It’s the kind of intervention that does little to shed light on the real issue at hand: how the markets are responding to the early stages of Truss’s economic agenda. But it provides plenty of fuel for both the Prime Minister’s detractors and her supporters.
Critics of the ‘mini-Budget’ have been fast to point out that the IMF’s comments read like something it might say about an emerging market, not a G7 country.
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