WASHINGTON (Reuters) – The International Monetary Fund (IMF) on Tuesday applauded the decision by Britain’s new finance minister to scrap most of a loan-financed fiscal package, saying it signals commitment to fiscal discipline.
“The recent announcements by the UK authorities signal a commitment to fiscal discipline and help to better align fiscal and monetary policy in the fight against inflation. We look forward to the Medium-Term Fiscal Plan,” an IMF spokesperson said in an emailed statement to Reuters.
Britain’s new finance minister Jeremy Hunt on Monday scrapped most of Prime Minister Liz Truss’ proposed tax cuts and energy subsidies, saying it was “not right” to borrow money to finance them. them. His announcement sent the pound and government bonds soaring.
IMF Managing Director Kristalina Georgieva sharply criticized Truss’s original fiscal plan during the IMF’s annual meetings last week, recommending to then-Finance Minister Kwasi Kwarteng and Bank of England Governor Andrew Bailey that ensure that the UK’s fiscal and monetary policies do not work against each other in fighting inflation.
(Reporting by Andrea Shalal and David Lawder)
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