Tuesday, May 22, 2012

IMF Gives Stark Warning To UK Over Eurozone....In Other Words stick you Hands in your Pockets

An escalation of the eurozone crisis would deliver a "substantial contractionary shock" to the UK economy, setting back progress made towards recovery, the International Monetary Fund (IMF) has warned.

In a report on the UK, the IMF identified uncertainty over the future of the euro as the main danger to recovery and warned: "Risks are large and tilted clearly to the downside."

The report recognised "substantial progress" towards balancing Britain's books thanks to the coalition Government's deficit-reduction programme, but noted that the economy remains "flat" and warned that the weak recovery may be "more protracted than previously anticipated".

The IMF warning came as UK inflation fell to its lowest level in more than two years, providing welcome relief to household budgets.

More follows...