IMF APPLAUDS UK'S "IMPRESSIVE" ECONOMIC PERFORMANCE

"The performance of the UK economy continues to be impressive" and macroeconomic prospects "remain good" according to the latest assessment by experts from the International Monetary Fund.

At a discussion in Washington on 1 March, the IMF's Board of Directors concluded that the Government was on course to deliver its central economic objective of high and stable levels of growth and employment. The IMF assessment says that "real growth has been strong...and both unemployment and inflation have declined steadily".

The Directors' assessment was that "the authorities' policy frameworks and their track record of skilful policy management would be conducive to a continuation of sustained growth and low inflation"

Commenting on the IMF's report, the Chancellor, Gordon Brown, said:

"I welcome the IMF's report on the UK economy. It clearly supports the Government's new framework for economic policy, and our prudent and cautious approach to managing the public finances, and the efforts we are making to promote enterprise and fairness in this country."

The UK has been championing transparency and openness in the IMF's scrutiny of countries' economic policies and performance. This transparency is a key element in avoiding future international crises. Today's publication marks a further step forward by the UK. We are publishing for the first time the IMF's report on the UK in full, along with the record of the IMF Board discussion of the report, and the UK's statement in response to the report. The Chancellor welcomed these new publications, saying;

"The publication of the IMF's report on the UK economy clearly demonstrates our commitment to open up the IMF's scrutiny process. Today marks an important step forward by the UK in economic policy making, by making available clear independent information on policy that is an essential part of the new international financial architecture."

Other points the IMF Directors have made include:

praise for the "effectiveness of the inflation targeting framework in the United Kingdom", and in particular "the forward-looking, transparent and pre-emptive approach." They added that "the transparency of the UK monetary framework is already among the highest internationally".
a welcome for "the efficiency gains and improved public resource allocation arising from the strengthened fiscal framework".
They "praised the authorities for focussing long term policies toward achieving greater equity and strengthening productivity."
praise for the Government's policies to move people off welfare and into work, and to make work pay. They note the Government's welfare and labour market reforms "were aimed at strengthening incentives to work, particularly among jobless households."

NOTES TO EDITORS

1. IMF surveillance of every major economy is carried out primarily through annual consultations between Fund staff and member Governments and central banks, called Article IV consultations. The resulting reports are discussed at the IMF's Executive Board. The consultations for UK's 1999 Article IV report took place from 12 to 22 November 1999. The final report was discussed at the IMF's Board on 1 March 2000. As part of the Government's drive to increase transparency, domestically and internationally, we published the Concluding Statement of the IMF Mission just after the Mission team completed their work in November (HMT Press Release 197/99, 24 November 1999). To further enhance the transparency of the scrutiny process we are today publishing, for the first time, the IMF's report in full, along with the IMF's Public Information Notice and the UK's statement to the IMF Executive Board which sets out the Government's response to the report (the so-called 'Buff' statement). The UK report is being released as part of an 18 month pilot project for the voluntary release of Article IV staff reports.

2. The full text of the report will be published on the IMF's website.

3. Enquiries on the IMF report should be addressed to Francis McGee (020 7270 5196 mobile 0831 853760) in the Treasury Press Office.

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