'The IMF statement is very serious, and it shows just what a mess the government have made of the economy.'
The International Monetary Fund (IMF) has openly come out against the Tory government’s huge tax cuts which disproportionately benefit the wealthy, warning that they will further fuel inflation during the cost of living crisis and likely increase inequality.
In what is a rare intervention, the Washington-based fund took aim at the government, after chancellor Kwasi Kwarteng retained his faith in trickle-down economics, putting in place tax cuts for the wealthy in his mini-budget last week, but doing nothing to help the poor and vulnerable.
Many experts criticised Kwarteng’s plans as a mini-budget for the 1%. The pound has also plunged to its lowest level against the US dollar since 1985.
The £45bn tax cuts have sparked fears that government borrowing could surge along with interest rates.
The IMF has also warned that ‘the nature of the UK measures will likely increase inequality”.
Labour leader Keir Starmer has urged the government to urgently reconsider its mini budget plans.
He told LBC’s Nick Ferrari this morning: “The IMF statement is very serious, and it shows just what a mess the government have made of the economy. And it is self-inflicted. This was a step they didn’t have to take …
“We all look at the graph and we see the pound falling, but it’s not an abstract graph; this is reflected in people’s mortgages etc and people are very, very worried this morning.
“Some people who thought they had a mortgage arrangement last week now haven’t got one. Imagine that, a first-time buyer, suddenly your dream goes up.
“This government has got to respond to this. They’ve got to set out, in terms, how are they going to fix the problems that they have made.”
Basit Mahmood is editor of Left Foot Forward
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