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| IMF: UK 'should offset austerity' | |
| (about 1 hour later) | |
| The UK could do more to offset the negative impact of austerity measures on the economy, the IMF has said. | |
| In the concluding statement of its mission to the UK, the global body said the economy was still a long way from "a strong and sustainable recovery". | In the concluding statement of its mission to the UK, the global body said the economy was still a long way from "a strong and sustainable recovery". |
| It acknowledged the UK's austerity programme had earned the government credibility. | |
| But it also warned that measures would act as a drag on economic growth. | |
| Speaking at a press conference in London, the IMF's deputy managing director, David Lipton, suggested the government should slow the rate of its austerity programme by bringing forward measures like infrastructure spending. | Speaking at a press conference in London, the IMF's deputy managing director, David Lipton, suggested the government should slow the rate of its austerity programme by bringing forward measures like infrastructure spending. |
| "It would be, in our view, useful for the economy for infrastructure and other measures to be brought forward to reduce the drag of austerity measures... and provide more support for the economy," he said, in response to questions from journalists. | "It would be, in our view, useful for the economy for infrastructure and other measures to be brought forward to reduce the drag of austerity measures... and provide more support for the economy," he said, in response to questions from journalists. |
| He said the IMF's recommendations did not involved the government spending more over the medium term. | |
| 'No silver bullet' | |
| "The recommendation we have made today are fiscally neutral," he said. | |
| "We're suggesting that within the multi-year medium-term framework that the government has laid out that it should advance infrastructure spending to provide more support for the economy. | |
| "But that said... one has to evaluate the impact on policies on the economy as you go so whether the present medium-term framework turns out to be an appropriate one when measured next year or the year after remains to be seen." | |
| However he admitted there was "no single silver bullet" for the UK's economic problems. | However he admitted there was "no single silver bullet" for the UK's economic problems. |
| The IMF also said a "clear strategy" was needed for the UK's two part-nationalised banks, Lloyds Banking Group and Royal Bank of Scotland (RBS). | |
| "Any strategy should seek to return the banks to private hands in a way that maximises the value for taxpayers," the statement said. | |
| But Mr Lipton said further financial help for the two banks should not be ruled out. | |
| Also speaking at the press conference, Chancellor George Osborne said the UK would not "duck its economic challenges", and expressed his determination to return RBS and Lloyds to the private sector. |