THE IMF’S UK ASSESSMENT
Growth has been flat, in part because of “essential” deficit reduction and households cutting their debts, but also because of the Eurozone crisis
Unemployment is falling and remains relatively low considering economic woes
Growth should pick up over the second half of this year, as long as the Eurozone crisis does not worsen sharply
Inflation should fall below target in the next 18 months, assuming no more jumps in commodities prices
Cutting interest rates below 0.5 per cent will help stimulate economic growth, as would more quantitative easing
The deficit reduction plan is on target and going well, but could be adjusted to boost growth – for example, by spending more on infrastructure and less on public sector wages
A sustained push to ease planning restrictions will also help the economy by allowing the private sector to fill the space left by the public sector cuts to building work
If the economy worsens, even more could be spent on infrastructure, while short-term tax cuts could also help growth
Efforts to stabilise the financial sector should be extended, including by granting additional powers to regulators to limit the size of loans