The International Monetary Fund (IMF) has urged Britain to consider cutting interest rates below their already historically-low level and apply additional quantitative easing (QE) measures to stimulate growth.
IMF Managing Director Christine Lagarde and UK Chancellor of the Exchequer George Osborne gave a news conference in London today, which they discussed the economic situation in UK and the wider continent. She also suggested that it prepare a "Plan B" for deficit reduction in case the other measures failed.
Lagarde praised the efforts carried out to date but said that growth was too slow and unemployment is too high. "Policies to bolster demand before low growth becomes entrenched are needed, " she said. She also proposed a sales tax cut, among other measures.
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Lagarde and Osborne also commented on Greece, with Osborne already speculating a possible exit from the Eurozone. "While we work for the best, we prepare for something worse," Osborne said this morning.
The IMF chief remains more hopeful: "I hope that whoever wins Greek elections will engage in constructive dialogue to implement plans. The IMF has to look at all alternatives on Greece. If a new Greek government has better ideas, we will listen. The same reforms will have to be made whoever wins Greek election," Lagarde said.
Lagarde also advised other European leaders that more structural reforms are needed to boost growth and protect the region.
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