"Fiscal policy should not work at cross-purpose with monetary authorities’ efforts to bring down inflation," said Pierre-Olivier Gourinchas, the IMF’s economic counsellor, not naming the UK specifically. Aligning fiscal policy with the central bank by removing demand would help stabilize U.K. markets, he added. "It’s very clear that stability can be improved in financial markets and more broadly with a fiscal fiscal package that is going to be consistent with that," he said. The IMF figures show UK inflation will still be at 6.3% at the end of next year, above every other Group of Seven industrial nation. "Fiscal policy can help economies adapt to a more volatile environment by investing in productive capacity: human capital, digitalisation, green energy, and supply chain diversification," he said.

Source: News 24 October 12, 2022 01:52 UTC