IMF warns against further austerity

George Osborne should "tone down" austerity measures.

"We've never been passionate about austerity,” Blanchard told the BBC today. Photograph: Getty Images

The IMF chief economist has said the chancellor George Osborne should tone down austerity measures in the Budget in March.

Olivier Blanchard’s warning follows yesterday's IMF downgrade of its forecast for the UK growth to just 1 per cent for this year.

"We think this would be a good time to take stock," Blanchard said, speaking to Radio 4's Today programme, adding that the global economy was "not out of the woods yet".

Three months ago the IMF prediction for 2013 was 1.1 per cent. The official government forecast for growth is 1.2 per cent.

An IMF report in October warned that austerity had hurt wealthy countries such as the UK more than most analysts had expected.

"We've never been passionate about austerity,” Blanchard told the BBC today. “From the beginning we have always emphasised that fiscal consolidation should be slow and steady."

This story first appeared on economia.