IMF Calls on UK to Do More to Boost Economy

The International Monetary Fund has issued a tough assessment of U.K. economic policy, urging the coalition government and Bank of England to do more to boost demand in the economy.

LONDON — Britain’s economy shrank more than expected at the end of 2012 with a North Sea oil production slump, lower factory output and a hangover from London’s Olympics pushing it perilously close to a “triple-dip” recession. The country’s gross domestic product fell 0.3% in the fourth quarter, the Office for National Statistics said on Friday, sharper than a 0.1% decline forecast by analysts.

In its annual report the International Monetary Fund urgently advised the UK to increase its infrastructure budget to boost the economic recovery of the country, reported Financial Times.  

Finance Minister Jim Flaherty’s determination to balance Canada’s budget in two years increases the likelihood the government will lean on Mark Carney’s replacement at the head of the Bank of Canada to boost growth in the nation’s economy. Flaherty’s plan to eliminate the deficit in time for elections in 2015 limits scope for further fiscal stimulus and increases the responsibility for the country’s next central banker to take the lead in responding to any economic slowdown.

Fed chairman Ben Bernanke is at odds with Brazil, China, and even the IMF over his policies. Please consider the BBC report Bernanke defends Federal Reserve stimulus measures Brazil has said US monetary easing to keep interest rates low and weaken the dollar has hurt emerging economies. And International Monetary Fund chief Christine Lagarde warned on Sunday of consequent asset bubbles developing in emerging nations.