Tuesday, May 22, 2012

IMF calls for Plan B on economy......I Have One!! Get Rid of Plan A (Europe)

The Government should consider cutting VAT or National Insurance and increasing state investment in infrastructure to boost growth if the economic situation worsens, the International Monetary Fund (IMF) said.

Officials also said that the Bank of England should act now to inject some vigour into a "flat" economy by printing money in a new round of quantitative easing or even cutting the 0.5% base interest rate below its current historic low.

In an annual report on the state of the UK economy, the IMF said that deficit reduction was "essential" in the medium term and paid tribute to the "substantial progress" towards a sustainable budget delivered by the coalition Government's austerity programme.

"When I think back to May 2010, when the UK deficit was at 11%, and I try to imagine what the situation would be like today if no such fiscal consolidation programme had been decided, I shiver," said IMF managing director Christine Lagarde. Read More