UK

Pound news – live: Sterling falls again after ‘very serious’ IMF warning to Kwarteng

The International Monetary Fund’s warning over Liz Truss and Kwasi Kwarteng’s tax cuts for the rich is “very serious” and shows “what a mess the government has made of the economy”, Labour’s Sir Keir Starmer has said, as the pound tumbled again in Asian trading.

In a rare intervention, the IMF took aim at the government, warning that “large and untargeted fiscal packages” would “likely increase inequality” in Britain, after the chancellor’s mini-Budget on Friday caused sterling and bonds to plummet to an all-time low and gilt yields to soar, reflecting the cost of borrowing.

“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,” an IMF spokesperson said.

In response, a Treasury spokesperson said: “We have acted at speed to protect households and businesses through this winter and the next, following the unprecedented energy price rise caused by [Russian president Vladimir] Putin’s illegal actions in Ukraine.”

Xural.com

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