London Daily

Focus on the big picture.
Monday, Sep 07, 2026

'Don't prolong the pain': IMF criticises UK government for 'undermining' Bank of England

'Don't prolong the pain': IMF criticises UK government for 'undermining' Bank of England

Kristalina Georgieva, the head of the International Monetary Fund, was speaking at a news conference in Washington after the government's mini-budget unleashed chaos in the markets.

The head of the International Monetary Fund has delivered a blunt condemnation of the UK government's mini-budget - pointing out government and Bank of England policies should not be working against each other.

Kristalina Georgieva was speaking at a news conference in Washington after the government's mini-budget unleashed chaos in the markets when it was announced last month.

Asked by US correspondent Mark Stone if she had any messages for Prime Minister Liz Truss and the UK, Ms Georgieva said: "Fiscal policy should not undermine monetary policy.

"Because if it does, the task of monetary policy becomes only harder and it translates into the necessity for an even further increase of rates and tightening of financial conditions.

"Don't prolong the pain. Make sure that actions are coherent and consistent."

She added that it is "correct to be led by the evidence, so if the evidence is that there has to be a recalibration, it's right for governments to do so".

Fiscal policy is how the government spends money, while monetary policy is the control of interest rates exercised by the Bank of England.

Ms Georgieva's remarks come after the IMF's chief economist told Sky News the chancellor's mini-budget "complicated matters" for the Bank of England as it battled to bring down inflation.

Olivier Gourinchas also said the tax cuts announced by Chancellor Kwasi Kwarteng late last month threatened to cause "problems" for the UK economy, coming as they did when the Bank was attempting to raise interest rates.

Mr Kwarteng's mini-budget announcement, which included billions of pounds worth of unfunded tax cuts meant to encourage growth, has led to a contradiction in policy between the Bank and the government.

While the government is trying to encourage growth, the Bank is attempting to suppress it, by raising interest rates, to bring inflation down to its 2% goal.

The thinking behind the interest rate rises that have been brought in by central banks across the world, including the Bank of England, is that raising interest rates will bring down inflation.

Higher interest rates make repaying debt more expensive but the Bank believes the action will lead to a shorter economic downturn than not acting to stem inflation.

Ms Georgieva also praised UK institutions at the news conference in Washington on Thursday.

She said: "You have a country with strong institutions and strong traditions, transparent, evidence-based policymaking.

"And it is the foundation of these institutions, of course, the independent Bank of England, the Office for Budgetary Responsibility, the engagement of the parliament, the public, you from the press that gives the reputation of the UK, of a country with a strength in economic policymaking."

Newsletter

Related Articles

0:00
0:00
Close
University of Bristol Opens £500 Million Temple Quarter Enterprise Campus
Online Bookmakers Accused of Privacy Breaches Through Cookie Consent Practices
Health Campaigners Urge UK Government to Abandon U.S. Pharmaceutical Agreement
Three-Quarters of UK A&E Staff Report Regular Violence or Aggression
Far-Right Demonstrations Target Portsmouth as Small-Boat Crossings Fuel Tensions
UK Records Hottest Summer on Record After Severe Heatwaves
UK Travellers Face Renewed EU Border Delays as Temporary Flexibility Ends
UK Rejects Calls to Pause AI Data Centre Expansion Despite Energy Concerns
UK Defence Figures Push for 3% Spending Target Amid Falklands Concerns
England Faces Rising Financial Pressure as Special Educational Needs Plans Surge
Metropolitan Police Consider Reform UK Probe Over Overseas Donations
Keir Starmer to Leave Parliament, Triggering By-Election
UK Treasury Weighs Windfall Taxes on Banks and Oil Companies Amid Bond Market Turmoil
Jaguar Land Rover to Cut Thousands of Jobs as UK Government Rules Out Bailout
OpenAI Unveils GPT-6 and Says: "We May Already Have Reached AGI"
Congressman Accused Andrew of Sex Crimes in the United States
Donald Trump: "I'm Glad Harry and Meghan Left the United States"
Spicy Food Is Linked to Lower Death Risk — but It Is Not a Miracle Cure
AfD Enters Saxony-Anhalt Election at 41% in Historic Test for German Politics
Gen Z Turns to Investing as America's First-Home Dream Moves Further Out of Reach
Thousands Join London March Calling for Tighter Abortion Restrictions
Institute of Directors Says Tax and Regulatory Uncertainty Still Weighs on UK Investment
Bank of England Faces Rate Dilemma as Weak Growth and Persistent Inflation Raise Stagflation Risks
Masked Anti-Immigration Protesters Block Roads to Port of Dover
Prime Minister Andy Burnham Sets Out Devolution and Re-Industrialisation Agenda
British Chambers of Commerce Forecasts UK Growth of Just 1% Through 2027
UK Government Advances Bill to Tighten Rules on Overseas Political Donations
Nigel Farage Faces Scrutiny Over Alleged Reform UK Donation-Law Evasion
Thousands Join Anti-Abortion March Through Central London
UK Beekeepers Call for Nationwide Tracking as Asian Hornet Sightings Increase
England Sees Sharp Rise in Property Subsidence Claims After Record Summer Heat
House of Lords Advances Financial Services Reform Bill
House of Lords Begins Detailed Scrutiny of Railways Bill and Great British Railways Plan
UK Treasury Cuts Green Book Discount Rate to Support More Regional Infrastructure Projects
Reform UK Suspends Two Senior Aides After Undercover Report on Foreign Donation Rules
UK Chancellor Warns Autumn Budget Will Require Tough Choices as Energy Shock Squeezes Public Finances
UK Parliament Raises Concerns Over Funding Structure of £400 Million Tropical Forest Initiative
Andy Burnham Launches Number 10 North as Part of UK Devolution Push
UK Reaffirms Falkland Islands Sovereignty Amid Renewed Regional Pressure
Andy Burnham to Abstain From Assisted Dying Vote as Ministers Are Told to Remain Neutral
Kemi Badenoch Sacks Shadow Chancellor Mel Stride in Conservative Economic Strategy Shake-Up
UK Government Drops Early Prisoner Release Plan in Favor of Deportations and Wider Prison Reform
UK Farmers Warn Drought-Hit Harvests Could Push Grocery Prices Higher
UK Economy Faces Persistent Stagflation Risks Ahead of October Budget
Masked Protesters Block Port of Dover Roads, Disrupting Cross-Channel Traffic
Reform UK Suspends Senior Officials After Undercover Investigation Into Foreign Donation Plans
UK Urges Households to Keep Emergency Supplies Amid Severe El Niño Warning
Prime Minister Andy Burnham Sets Out Regional Industry and Prison Reform Agenda
Siemens Energy Wins Rolls-Royce Small Modular Reactor Manufacturing Contract
UK Mortgage Costs Rise as Gilt Yields and Swap Rates Climb
×