de | cn | ru

Market News

IMF Urges UK To Slow Fiscal Consolidation If Growth Remains Sluggish

Jul 20 2012

The U.K. government should not accelerate its fiscal consolidation if growth fails to gather momentum despite further monetary and credit easing, the International Monetary Fund said in a review report on Thursday.

"Persistent weak growth that hinders achievement of fiscal targets might also pose risks to credibility," the Fund observed.

Under current fiscal plans, the pace of consolidation is expected to accelerate next year to around 1.5 percent of GDP. However, the government plans to ease the pace of fiscal consolidation to 0.5 percent of GDP in fiscal 2012-13, due to substantial downward revisions to potential GDP.

"Any adjustment to the path of consolidation should be in the context of a multi-year plan and ideally accompanied by deeper long-run entitlement reform to help preserve credibility," the Directors of the IMF mission to the UK said.

The Directors welcomed the recent policy measures announced by the government and the Bank of England to prop up the economy, which slipped into recession in the first quarter of 2012.

The IMF staff welcomed BoE's July decision to provide more stimulus, while some noted that further easing may be needed, including a cut in the policy rate. However, some of the staff noted that the scope for more monetary easing through interest rate cut and quantitative easing may be limited, given that interest rates on government debt are already very low.

They also applauded the British authorities for recent measures aimed at lowering private-sector borrowing costs through broader provision of bank funding against collateral.

At the same time, they felt that depending on the use and performance of these new programs, further credit easing measures may be needed. The directors observed that deeper budget-neutral reallocations could also support recovery, including greater investment spending funded by property tax reform or spending cuts on items with low multipliers.

The report urged the authorities to give more emphasis on policies that should focus on strengthening bank balance sheets by building capital rather than reducing assets to balance stability and growth considerations.

The IMF forecasts the economy to expand 0.2 percent in 2012 and 1.4 percent in 2013. The unemployment rate is expected to rise to 8.3 percent in 2012 and 2013 from 8 percent in 2011.

According to IMF, inflation will decline below the 2 percent target over the medium term, as the large output gap exerts disinflationary pressure.

The material has been provided by Instaforex Company -
TAGS: IMF  Urges  UK  To  Slow  Fiscal  Consolidation  If  Growth  Remains  Sluggish   

Related forex news

Broker Country Regulation Platform Min Deposit Review
$50 Review Website
US NFA, CFTC MT4 $250 Review Website
Cyprus, UK, Mauritius CySec, FCA, FSC MT4, MT5, Web $10 Review Website
Australia ASIC MT4, MT5,
$100 Review Website
Cyprus, Australia CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia, South Africa FCA, ASIC, FSCA MT4, Trading
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
UK FCA MT5 $5 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website
Australia, UK ASIC, FCA MT4, MT5,
$200 Review Website
UK, Cyprus, Dubai FCA, CySEC, DFSA MT4, MT5, Web,
$100 Review Website

More Forex Market News

Philippine police arrests 277 employees in connection to a forex scam

Sep 16 2019 17:33:44

Acting on a tip from the Chinese intelligence agency the Philippine police has arrested 277 Chinese nationals working for online forex and crypto scammers. Read more

FCA prepares for a no deal Brexit

Sep 12 2019 17:05:09

The Financial Conduct Authority (FCA) in the UK has opened an emergency phone line (+44 800 048 4255), as well as a series of specialized information websites that are intended to help the financial sector cope with the possible consequences of a no deal Brexit. Read more

Police in Taiwan warns of forex scams on dating websites

Sep 11 2019 14:08:40

The Criminal Investigation Bureau (CIB) in Taiwan warns of a new wave of investment scams on dating and chat websites, featuring a case of a man who lost over 4 million Taiwanese Dollars (128 000 USD). Read more

The Marshall Islands launches a sovereign crypto coin

Sep 04 2019 16:57:05

The Marshall Islands, the small Pacific nation that is also a favorite offshore destination for many brokers that prefer to avoid the strict regulations in Europe, the U.S. Read more

Dutch authorities to regulate all crypto dealing firms

Sep 03 2019 13:43:03

The Dutch Central Bank announced new rules for all companies dealing with crypto currencies that will take effect from January 2020. Read more

Ex-BinaryBook employee sentenced to a year in prison in the US

Sep 02 2019 14:26:10

  Israeli binary options operative Lissa Mel pled guilty to her role in $145 million scam scheme, and was sentenced to a year in prison and $288 024 in restitution to victims by a US federal court previous week. Read more

SEC settles with Bitqyck and its founders accused of $13m fraud

Aug 30 2019 12:53:53

  The US Securities and Exchange Commission (SEC) has settled with founders of crypto exchange Bitqyck over an alleged $13 million fraud. Bitqyck’s founders Bruce Bise and Sam Mendez will pay a civil penalty of $8.5 million on top of disgorgement and prejudgment interest. Read more

Forexbit ends up on FCA's warning list

Aug 29 2019 11:34:29

The Financial Conduct Authority (FCA) in the UK added Forexbit to its long list of companies that illegally target British customers and offer financial services without a license. Read more

Thai SEC warns against FXtrading Corporation

Aug 28 2019 13:06:37

  The Thai Securities and Exchanges Commission (SEC) warned the public against FXtrading Corporation - a new cryptocurrency scam targeting local investors. Read more

CNMV warns against Exilon Markets, and numerous brands of Game Capital Ads

Aug 27 2019 13:27:16

  The Comision Nacional del Mercado de Valores (CNMV) warned against Exilon Markets, BeAlgo, CapitalFXclub, numerous brands of Game Capital Ads, and several other unregulated entities. These brokers are not authorized to provide investment services or investment advice in Spain, the CNMV said. Read more

de | cn | ru