IMF statement keeps the focus on the pound this week

It’s rare to see the IMF stepping on the toes of developed nations but such is the predicament in the UK at the moment after the run against the currency and collapse of the bond market following Kwarteng’s budget announce last Friday. Here are some excerpts from the IMF statement towards the UK on the matter:

• We are closely monitoring recent economic developments in the UK and are engaged with the authorities
• It is important that fiscal policy does not work at cross purposes to monetary policy
• We do not recommend large and untargeted fiscal packages at this juncture
• The November 23 budget will present an early opportunity for the UK government to consider ways to provide support that is more targeted and re-evaluate the tax measures

The pound is down 0.4% against the dollar to 1.0690 on the day, with the low earlier touching 1.0630 in Asia trading. The IMF statement isn’t telling us anything that we don’t already know but it will just add to scrutiny to the pound and gilts, after the rout suffered over the past few days.