The International Monetary Fund (IMF) has advised UK Chancellor Rachel Reeves to relax her fiscal rules in order to avert emergency spending cuts, especially amid economic downturns. In its annual review, the IMF acknowledged upgraded growth forecasts for the UK while stressing the need for a revised fiscal strategy. Amid rising pressure from Labour MPs and political opponents, the IMF suggested prospects for fiscal policy reform, including changing the assessments conducted by the Office for Budget Responsibility (OBR) to accommodate shifts in economic outlook.
The IMF's annual review recommends Rachel Reeves loosen her fiscal rules to avoid emergency spending cuts and better manage economic downturns.
The IMF has emphasized that the UK’s fiscal rules inherited from the Conservative government need reform, suggesting they contribute to frequent policy changes.
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