IMF....11 Oct 2022 17:18
warns rising prices will be worse in UK.
The International Monetary Fund (IMF) has doubled down on criticism of the chancellor's mini-budget, days after warning it will fuel rising prices.
The body, which works to create global financial stability, admitted tax cuts announced by Kwasi Kwarteng would lift economic growth in the short-term.
But it said the cuts would "complicate the fight" against the cost-of-living crisis.
It also warned that "for many people 2023 will feel like a recession".
Inflation, which measures how the cost of living changes over time, is expected to peak at about 11.3% before the end of the year in the UK, according to its latest report on the outlook for the global economy.
The most recent figures included in the report by the influential financial institution do not fully, however, take into account the chancellor's recent mini-budget.
Economic growth in the UK is set to grind to a near halt next year, growing by 0.3%.
That marks a 0.2% downgrade from the IMF's July forecast, and a sharp fall from the 3.6% rate of growth for the UK economy expected in 2022.
The body, which works to stabilise the global economy, has also downgraded its economic growth forecasts due to the impact of Russia's Ukraine invasion.
'Steady hand'
After Kwasi Kwarteng unveiled plans for huge tax cuts, the IMF criticised the plans warning they were likely to increase inequality and add to pressures pushing up prices.
It was an unusually outspoken statement from the IMF which works to stabilise the global economy and one of its key roles is to act as an early economic warning system.
It said it understood the government's package aimed to boost growth, but it said that the tax cuts could speed up the pace of price rises, which the UK's central bank is trying to bring down.
In its latest report on Tuesday, economic counsellor Pierre-Olivier Gourinchas said: "As storm clouds gather, policymakers need to keep a steady hand".
read more;
https://www.bbc.co.uk/news/business-63206733
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