London, Nov. 19 (BNA): The Managing Director of the International Monetary Fund, Kristalina Georgieva, said she spoke with British Finance Minister Jeremy Hunt on Friday to welcome his latest £55 billion ($65 billion) budget tightening plan.
“She strikes the right balance between fiscal responsibility and protecting growing and vulnerable families,” Georgieva said in a brief statement on social media.
The International Monetary Fund had criticized Kwasi Quarting, Hunt’s predecessor, over the previous budget plans in September, which included 45 billion pounds of unfunded tax cuts.
These plans rattled the market, driving the pound to a record low against the US dollar, forcing the Bank of England to intervene in the bond market and ultimately costing the British Prime Minister at the time, Liz Truss, the job.
Georgieva said Hunt’s proposals — which see taxes raised almost immediately, but delay most spending cuts until after 2024 — were an appropriate response at a time when the economy is in dire straits.
“In a telephone call with Chancellor Hunt today, I welcomed the (British) autumn statement which has been prepared at a difficult time for the British economy, in the face of global headwinds,” she said.
British inflation hit a 41-year high of 11.1%, and the Office for Budget Responsibility estimates that the economy is now in recession and that this year households will suffer the biggest drop in real income since records began in the 1950s.
Hunt’s plan envisages tax increases and spending cuts equivalent to 2% of GDP by the 2027-28 fiscal year.
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