After months of economic instability as a result of decisions by former Prime Minister Liz Truss, and amidst news that compared to other advanced economies, Britain has a lot of work still to do, current chancellor Jeremy Hunt has made the claim that the nation is back to form.
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After meeting with the International Monetary Fund during the Spring Meetings in Washington, Chancellor Hunt reported that his political counterparts in other countries had told him that ‘Britain is back’ and shared that they are grateful for the help the country reliably provides to help solve global issues.
Not without criticism
After Truss’ controversial plans ousted her from office, current officials have been doing all they can to return the nation to good standing, including raising rates 11 times over the past 18 months to 4.25%.
Despite claims that we’re back on top, experts aren’t holding back their criticism. IMF economists warned that central banks such as the Bank of England and the US Federal Reserve are losing the fight against inflation and are condemning these banks’ refusal to admit that mistakes were made in the process of trying to stabilise the economy. With the lack of accountability and responsibility being taken, many are doubting that these banks will be able to get the job done and are concerned that investors will lose faith.
Mohamed El-Erian, a chief economic adviser at Allianz has said: “I’m terrified that if central banks don’t own their mistakes and are public about this process, people are going to say, you’re not accountable enough, and I’m not sure that you should have the amount of political autonomy that you do.”
Lots of problems to tackle
Getting Britain back to form is no easy feat. Not only is the nation facing the task of lowering inflation, but they will need to do so without damaging growth and maintaining financial stability. Raising rates again so soon could be a disaster for recovery, according to experts. Allowing more time in between rate hikes will have a significant impact on the economy, so with the economy currently a long way to go before reaching pre-Covid trends, central banks like the Bank of England will need to practice patience in order to regain the confidence of the people.
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