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IMF on the UK Economy

Well rather interesting comments this morning, key comments include:
Much of this underperformance relative to earlier
expectations is due to transitory commodity price shocks and heightened uncertainty
following the intensification of stress in the euro area

(I.e. stress in Europe & inflation)
Fiscal easing and further use of the government’s balance sheet should be considered if downside risks materialize and the recovery fails to take off.
In particular, if growth does not build momentum and is significantly below forecasts even after substantial additional monetary stimulus and further credit easing measures, planned fiscal adjustment would need to be reconsidered.
Fiscal easing measures in such a scenario should
focus on temporary tax cuts and greater infrastructure spending, as these may be more credibly temporary than increases in current spending.

However this was counterbalanced by comments regarding the risks of losing credibility with financial markets.

All in all seems pretty sensible to me.

Full article here: http://av.r.ftdata.co.uk/files/2012/05/UK-IMF.pdf

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