UK Treasury justifies latest economic measures after sharp criticism from IMF

The British treasury has defended the country’s decision to announce big tax cuts in its latest mini budget after criticism from the International Monetary Fund (IMF). Following the budget presented by finance minister Kwasi Kwarteng, the pound fell to an all-time low against the United States dollar.

"We have acted at speed to protect households and businesses through this winter and the next, following the unprecedented energy price rise," the Treasury said according to Sky News.

"We are focused on growing the economy to raise living standards for everyone," it added.

The government has said that the reason behind the increase in the gas and electricity prices was the ongoing conflict in Ukraine. Downing Street also said that the measures were taken “for the long run”.

Earlier, The IMF said that it was not convinced with the latest measures announced by the UK.

"Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy," an IMF spokesperson said, reported Reuters.

"We are closely monitoring recent economic developments in the UK and are engaged with the authorities," the spokesperson added while speaking about the British economy.

Meanwhile, the Bank of England raised its interest rates from 1.75 to 2.25 per cent in a bid to control the growing inflation and said that it “will not hesitate” to increase it even further in the future.