The UK government’s U-turn on tax cuts will help fight rising inflation, the International Monetary Fund said.
In a statement, the IMF said the changes would help “better align fiscal and monetary policies in the fight against inflation.”
The statement comes after the panel openly criticized the UK government for its plan to cut taxes in September.
Last month the IMF said the tax cut plan is likely to increase inequality and increase the pressures that are pushing up prices.
In unusual moves, she openly criticized the UK government’s tax cut plan, then warned that rising prices in the UK would be worse.
The IMF had said the policy clashed with measures aimed at slowing the rapid rise in the cost of living.
After the post-mini-budget market turmoil, the government reversed a commitment to cut the top tax rate.
Then, on Monday, new Chancellor Jeremy Hunt made a dramatic U-turn on the government’s tax cut plans, undoing much of the policies of former Chancellor Kwasi Kwarteng and Prime Minister Liz Truss.
On Tuesday, the IMF welcomed the U-turn, saying: “The UK authorities’ recent monetary policy announcements signal their commitment to fiscal discipline and are helping to better align fiscal and monetary policies in the fight against inflation.”
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