Top IMF officials have praised the UK’s plans to cut borrowing, putting it in a stronger light than other G7 economies. The comments suggest the Budget may contain tight spending plans and limited room for tax rises.
01Summary
- 01Kristalina Georgieva said the UK has taken action to reduce debt and deficit decisively and has a better growth prospect.
- 02The IMF’s chief economist, Silvana Tenreyro, said UK borrowing reductions “stand out”.
- 03The IMF says the UK is the only G7 country with a serious plan to reduce annual borrowing over the next few years, worth nearly 4% of GDP.
- 04The US, Germany and Japan are increasing borrowing, while Canada and Italy are keeping it at the same level.
- 05The article says the chancellor is likely to have limited room for extra spending and may need to keep tax rises limited in the upcoming Budget.
02Why it matters
The IMF’s comments point to tighter fiscal policy in the next Budget, which could affect public spending and pay talks. They may also support lower borrowing costs for the government and households if investors keep faith with the plans.
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