Damning IMF verdict on the UK's sluggish economy fresh humiliation for Reeves

INTEREST rates should be cut twice more this year to help Britain's sluggish economy, IMF chiefs have insisted.

- By News Reporter

Bosses at the global financial watchdog urged Bank of England chiefs to keep lowering borrowing costs from 4.25%.

The International Monetary Fund said it expected the pace of rate reductions globally to be slower than it did three months ago with the Bank of England tipped to cut “around twice more this year after pausing to assess incoming data”.

The intervention marks a fresh humiliation for Chancellor Rachel Reeves as she desperately tries to kickstart the economy following her major tax raid in last autumn's Budget and a dismal first 12 months in the job.

The Bank has cut twice this year and investors are fully pricing in one more reduction to 4% in August. But fears about the health of the economy may prompt further action.

Governor Andrew Bailey warned recently that last October's tax changes were hitting hiring and pay packets. He said companies were “adjusting employment and hours, and also having pay rises that are possibly less than they would have been if the [National Insurance] change hadn't happened”.