London Daily

Focus on the big picture.
Friday, Mar 06, 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
Iceland Supermarket Drops Trademark Challenge Against Icelandic Government in Long-Running Naming Dispute
UK Defence Secretary Visits Cyprus Following Scrutiny of Britain’s Response to Drone Attacks
Questions Grow Over Britain’s Military Readiness as Response to Iran Conflict Draws Scrutiny
UK Offers Failed Asylum Seeker Families Up to Forty Thousand Pounds to Leave Voluntarily
Saharan Dust Could Bring ‘Blood Rain’ to Parts of the UK as Weather Systems Shift
UK Deploys Additional Typhoon Fighter Jets to Qatar and Helicopters to Cyprus Amid Rising Middle East Tensions
Experts Urge Britain to Accelerate Renewable Energy Push as Global Conflicts Drive Up Costs
British Public Shows Strong Reluctance to Join Wider War in Iran
First UK Evacuation Flight Departs Middle East After Lengthy Delay
United Kingdom Imposes New Visa Requirements on Travelers from St. Lucia and Nicaragua
Iran Conflict Strains U.S.–U.K. Alliance as Trump and Starmer Clash Over Military Strategy
UK Interest Rates Could Rise Above Four Percent Again if Energy Shock Continues, Think Tank Warns
Starmer Defends Britain’s Iran Strategy as Badenoch Urges Stronger Military Support
Labour MP Says She Saw No Sign Husband Broke Law After Arrest in China Espionage Investigation
UK Jobless Rate Overtakes Italy’s for First Time in Years as Labour Market Weakens
United Kingdom Suspends Student Visas for Four Countries in Unprecedented Immigration Move
Campaigners Warn UK Student Visa Ban Could Push Migrants Toward Dangerous Channel Crossings
First U.K. Charter Flight for Stranded Nationals Set to Depart Oman Amid Middle East Crisis
France and United Kingdom Deploy Warships to Eastern Mediterranean as Middle East Conflict Escalates
U.K. Arrests Three Men Including Lawmaker’s Partner in Suspected China Espionage Investigation
Trump Says UK–US ‘Special Relationship’ Is Diminished Amid Middle East Dispute
UK Economic Forecasts Face Fresh Strain from Middle East Conflict and Rising Energy Costs
UK Reaffirms Close US Ties After Trump’s Public Criticism
Reeves Stresses Stability and Fiscal Discipline in UK Budget Update as Growth Outlook Shifts
UK Deploys Royal Navy Destroyer HMS Dragon to Cyprus After Drone Strike on RAF Base
Green Party Surges Past Labour in New UK Poll as Traditional Party Support Crumbles
Majority of Britons Oppose U.S. Use of UK Military Bases in Iran Conflict
UK Intensifies Evacuation Efforts from Oman, Working with Airlines to Boost Flight Capacity
Trump Condemns UK and Spain in Unusually Sharp Rift Over Iran Military Action
Trump Repeats UK Claims That Diverge from Verified Facts Amid Diplomatic Strain
UK Arrests Prominent Figures Linked to Epstein Network as Questions Mount Over US Action
Trump Says UK ‘Took Far Too Long’ to Approve Use of Airbases for Iran Strikes
Scope of Britain’s Role in the Expanding Middle East Conflict Comes Under Scrutiny
Trump Says He Is ‘Very Disappointed’ in Starmer Over Iran Comments
U.S. Embassy in Riyadh Struck by Drones Amid Escalating Iran Conflict
Starmer Confronts Strategic Test After Drone Strike Near British Base in Cyprus
Rolls-Royce Chief Signals Openness to Germany Joining UK-Led Fighter Jet Programme
UK Stocks Slip as Escalating Iran Conflict Triggers Global Market Selloff
UK Overhauls Asylum System to Make Refugee Status Temporary
Starmer Warns of ‘Reckless’ Iranian Strikes Amid Escalating Regional Tensions
British Base in Cyprus Targeted as Drones Intercepted Amid Expanding Iran Conflict
Starmer Diverges from Trump on Iran Strategy, Rejects ‘Regime Change from the Skies’
U.S. and Israel Intensify Strikes on Iran as Conflict Expands to Lebanon and Gulf States
Violent Pro-Iranian Protesters Storm U.S. Consulate in Karachi
Missile Debris Sparks Fires at Dubai’s Jebel Ali Port Near Palm Jumeirah
Iran Strikes U.S. Fifth Fleet Headquarters in Bahrain Amid Wider Gulf Retaliation
When the State Replaces the Parent: How Gender Policy Is Redefining Custody and Coercion
Bill Clinton Denies Knowing Woman in Hot Tub Photo During Closed-Door Epstein Deposition
Former U.S. President Bill Clinton Testifies on Ties to Jeffrey Epstein Before Congressional Oversight Committee
Dyson Reaches Settlement in Landmark UK Forced Labour Case
×