Thursday 4th of August 2011
The International Monetary Fund (the IMF) has given the thumbs up to the Coalition’s approach to handling the economic crisis we’re currently faced with.
According to the IMF, the cuts proposed and already introduced by the Government have significantly reduced the risk of a sovereign debt crisis - a situation which a number of European countries are struggling to avoid.
However, although it believed that the Government was on the right track in tackling the budget deficit, as we reported in one of our earlier articles - “Families £7,500 worse off over the next 5 years” - the impact of this policy is already starting to have a detrimental effect on British households.
In addition, the IMF raised concerns that the UK may be adversely susceptible to the fiscal situation in Greece due, in no small part, to our predominant financial position within the Eurozone. They have warned that this, allied to the current high inflation rate, could combine to undermine any recovery.
Finally, on a more positive note, although the economy grew by only 0.2% in Q2, and with virtually no growth in the preceding 2 quarters, the IMF’s analysis showed that this stagnation of growth was purely a short-term phenomenon and that they fully expected an improvement in these quarterly figures up to and beyond 2012.
By Kimberly Jamison
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- Bank of England measures 'may stimulate lending'
