The International Monetary Fund (IMF) has slammed the economic measures laid out by the Government warning that they will likely fuel the cost-of-living crisis.
Markets have been heavily affected since the Government laid out its mini-Budget, with bonds sinking and the Pound hitting record lows.
In a statement, the IMF said: “We are closely monitoring recent economic developments in the UK and are engaged with the authorities.
“We understand that the sizable fiscal package announced aims at helping families and businesses deal with the energy shock and at boosting growth via tax cuts and supply measures.
“We understand that the sizable fiscal package announced aims at helping families and businesses deal with the energy shock and at boosting growth via tax cuts and supply measures.
“However, given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy.
“Furthermore, the nature of the UK measures will likely increase inequality.
“The November 23rd budget will present an early opportunity for the UK government to consider ways to provide support that is more targeted and re-evaluate the tax measures, especially those that benefit high income earners.”
It is highly unusual for the IMF to issue such a statement in regard to a G7 country.
Speaking on Radio 4’s Today programme Adnan Mazarei, a former deputy director of the IMF, said such statements are “common with regard to emerging market countries with problematic policies, but not often about G7 countries.”
Chancellor Kwasi Kwarteng has heavily defended the cuts but markets have not been reassured.
