The government should slow the pace of budget cuts next year if growth in the UK does not recover, the International Monetary Fund (IMF) has said.
In its annual report on the UK, the IMF said that tax rises and spending cuts introduced since spring 2010 had lowered growth by a total of 2.5% over the past two years.
It reiterated that the UK required further monetary stimulus. This could include more quantitative easing and a cut to interest rates.
IMF head Christine Lagarde presented the summary findings in May but now the full report has been released.
"If growth does not take off and unemployment fails to recede even after substantial further monetary stimulus and strong credit easing measures have been given time to work, the policy response should include a further slowing of fiscal consolidation," the IMF said.
"In particular, fiscal adjustment for 2013-14 would need to be scaled back if growth does not build momentum by early 2013."
But it also said that substantial progress had been made towards achieving a more sustainable budgetary position.
bbc.co.uk
In its annual report on the UK, the IMF said that tax rises and spending cuts introduced since spring 2010 had lowered growth by a total of 2.5% over the past two years.
It reiterated that the UK required further monetary stimulus. This could include more quantitative easing and a cut to interest rates.
IMF head Christine Lagarde presented the summary findings in May but now the full report has been released.
"If growth does not take off and unemployment fails to recede even after substantial further monetary stimulus and strong credit easing measures have been given time to work, the policy response should include a further slowing of fiscal consolidation," the IMF said.
"In particular, fiscal adjustment for 2013-14 would need to be scaled back if growth does not build momentum by early 2013."
But it also said that substantial progress had been made towards achieving a more sustainable budgetary position.
bbc.co.uk
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