The International Monetary Fund (IMF) has warned the UK to ease its austerity measures after economic growth remains stagnant. The UK economy continues to struggle and it seems unlikely that it will regain its momentum by next year; as a result the IMF has suggested cutting taxes or increasing infrastructure expenditure in an attempt to jump-start the economy. High unemployment rates and continuing threats from the eurozone are stalling the UK’s recovery believes the IMF while it is thought that the Bank of England is struggling to support demand for further monetary easing. In addition the IMF has shown concerns over plans for fiscal consolidation if economic conditions do not improve in 2013.

The IMF has advised Britain that through further stimulus, monetary easing and government investment its economy may begin its recovery. The IMF released statements however suggesting that “repair and rebalancing of the UK economy is likely to be more prolonged than initially envisaged”. Additionally the IMF slashed its predictions for UK growth, with forecasts of the UK economy expanding by just 0.2 percent, further damaging prospects of recovery.

However the Bank of England and Treasury’s recent funding for lending scheme and additional £50 billion worth of quantitative easing was praised by the IMF as a “bold monetary stimulus” but it has been declared that more easing will be needed to properly kick-start economic recovery within the UK.