IMF says Britain does not need to speed up fiscal consolidation
EWU•EWU•EWU•EWU•The IMF said Britain should “stay the course” on fiscal consolidation rather than accelerate deficit reduction. Britain’s budget deficit was 4.4% of GDP last year, and the government aims to balance day-to-day spending with tax revenue by 2029/30.
The International Monetary Fund is not recommending that Britain speed up fiscal consolidation to reduce its budget deficit faster, fiscal affairs director Rodrigo Valdes said. “Our recommendation is ‘stay the course’,” he said, contrasting Britain with major economies that have little or no plans to reduce borrowing as interest rates rise.
Britain ran a budget deficit of 4.4% of GDP last year. The government aims to balance day-to-day, non-investment spending with tax revenue by the 2029/30 financial year, while Finance Minister John Healey is due to deliver his first annual budget on October 28. Valdes said raising revenue to fund defence spending was difficult, and called discussion of the social contract behind spending “very, very urgent.”
