Yuri Gribas/Reuters
International Monetary Fund logo in Washington
The International Monetary Fund on Tuesday applauded Britain’s new finance minister’s decision to scrap most of the loan-financed financial package, saying it indicated adherence to fiscal discipline.
Recent announcements by the UK authorities indicate their commitment to fiscal discipline and help better align fiscal and monetary policy in the fight against inflation. “We are looking at the medium-term financial plan,” an IMF spokesperson said in an emailed statement to Reuters.
Britain’s new finance minister, Jeremy Hunt, yesterday scrapped most tax cuts and energy subsidies proposed by Prime Minister Liz Truss, saying it was “not right” to borrow money to fund them. His announcement sent the pound and government bonds up.
International Monetary Fund Managing Director Kristalina Georgieva sharply criticized Truss’ original fiscal plan during the IMF’s annual meetings last week, recommending then-Finance Minister Kwasi Quarting and Bank of England Governor Andrew Bailey ensure that the UK’s fiscal and monetary policies do not work against each other in the fight against inflation.
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