Connect with us

Published

on

The head of the International Monetary Fund has delivered a blunt condemnation of the UK government’s mini-budget – pointing out government and Bank of England policies should not be working against each other.

Kristalina Georgieva was speaking at a news conference in Washington after the government’s mini-budget unleashed chaos in the markets when it was announced last month.

Asked by US correspondent Mark Stone if she had any messages for Prime Minister Liz Truss and the UK, Ms Georgieva said: “Fiscal policy should not undermine monetary policy.

“Because if it does, the task of monetary policy becomes only harder and it translates into the necessity for an even further increase of rates and tightening of financial conditions.

“Don’t prolong the pain. Make sure that actions are coherent and consistent.”

She added that it is “correct to be led by the evidence, so if the evidence is that there has to be a recalibration, it’s right for governments to do so”.

Fiscal policy is how the government spends money, while monetary policy is the control of interest rates exercised by the Bank of England.

Ms Georgieva’s remarks come after the IMF’s chief economist told Sky News the chancellor’s mini-budget “complicated matters” for the Bank of England as it battled to bring down inflation.

Olivier Gourinchas also said the tax cuts announced by Chancellor Kwasi Kwarteng late last month threatened to cause “problems” for the UK economy, coming as they did when the Bank was attempting to raise interest rates.

Mr Kwarteng’s mini-budget announcement, which included billions of pounds worth of unfunded tax cuts meant to encourage growth, has led to a contradiction in policy between the Bank and the government.

Read more:
Is my pension at risk? Your guide to the market mayhem facing funds
Government borrowing costs hit 20-year high after Bank of England confirms bond-buying will end on Friday

While the government is trying to encourage growth, the Bank is attempting to suppress it, by raising interest rates, to bring inflation down to its 2% goal.

The thinking behind the interest rate rises that have been brought in by central banks across the world, including the Bank of England, is that raising interest rates will bring down inflation.

Higher interest rates make repaying debt more expensive but the Bank believes the action will lead to a shorter economic downturn than not acting to stem inflation.

Ms Georgieva also praised UK institutions at the news conference in Washington on Thursday.

She said: “You have a country with strong institutions and strong traditions, transparent, evidence-based policymaking.

“And it is the foundation of these institutions, of course, the independent Bank of England, the Office for Budgetary Responsibility, the engagement of the parliament, the public, you from the press that gives the reputation of the UK, of a country with a strength in economic policymaking.”

Continue Reading

World

At least 20 reported dead in Israeli airstrike on Gaza school housing displaced people

Published

on

By

At least 20 reported dead in Israeli airstrike on Gaza school housing displaced people

At least 20 people have been killed and dozens more injured after an Israeli airstrike targeting a school in Gaza, health authorities have said.

Reuters news agency reported the number of dead, citing medics, with the school in the Daraj neighbourhood having been used to shelter displaced people who had fled previous bombardments.

Medical and civil defence sources on the ground confirmed women and children were among the casualties, with several charred bodies arriving at al Shifa and al Ahli hospitals.

The scene inside the school has been described as horrific, with more victims feared trapped under the rubble.

This breaking news story is being updated and more details will be published shortly.

Please refresh the page for the fullest version.

You can receive breaking news alerts on a smartphone or tablet via the Sky News app. You can also follow us on WhatsApp and subscribe to our YouTube channel to keep up with the latest news.

Continue Reading

World

Trump criticises Putin after deadly strikes across Ukraine

Published

on

By

Trump criticises Putin after deadly strikes across Ukraine

Donald Trump has threatened Russia with more sanctions after a series of deadly strikes across Ukraine, as he said of Vladimir Putin: “What the hell happened to him?”

The US president appeared aghast at the conduct of his counterpart in the Kremlin after drone and missile attacks in Kyiv and other Ukrainian cities left 12 people dead and dozens more injured.

Trump criticises Putin – latest updates

Speaking to reporters at an airport in New Jersey ahead of a flight back to Washington, Mr Trump said: “I’m not happy with Putin. I don’t know what’s wrong with him.”

“He’s killing a lot of people,” he added. “I’m not happy about that.”

Mr Trump – who said he’s “always gotten along with” Mr Putin – told reporters he would consider more sanctions against Moscow.

“He’s sending rockets into cities and killing people, and I don’t like it at all,” he said.

Ukraine said the barrage of strikes overnight into Sunday was the biggest aerial attack of the war so far, with 367 drones and missiles fired by Russian forces.

It came despite Mr Trump repeatedly talking up the chances of a peace agreement. He even spoke to Mr Putin on the phone for two hours last week.

Read more from Sky News:
Trump says will postpone 50% tariffs on EU until July

Please use Chrome browser for a more accessible video player

Hundreds of drones fired at Ukraine

‘Shameful’ attacks

Volodymyr Zelenskyy has said Ukraine is ready to sign a ceasefire deal, and suggested Russia isn’t serious about signing one.

In a statement after the latest attacks on his country, he urged the US and other national leaders to increase the pressure on Mr Putin, saying silence “only encourages” him.

Mr Trump’s envoy for the country, Keith Kellogg, later demanded a ceasefire, describing the Russian attacks as “shameful”.

Three children were among those killed in the attacks, explosions shaking the cities of Kyiv, Odesa, and Mykolaiv.

Ukrainian siblings Tamara, 12, Stanislav, eight, and Roman, 17, killed in Russian airstrike. Pic: X/@Mariana_Betsa
Image:
Ukrainian siblings Tamara, 12, Stanislav, eight, and Roman, 17, were killed in Russian airstrikes. Pic: X/@Mariana_Betsa

Before the onslaught, Russia said it had faced a Ukrainian drone attack on Sunday. It said around 100 were intercepted and destroyed near Moscow and in central and southern regions.

The violence has escalated despite Russia and Ukraine completing the exchange of 1,000 prisoners each over the past three days.

Continue Reading

World

Donald Trump says he will postpone 50% tariffs on EU until July

Published

on

By

Donald Trump says he will postpone 50% tariffs on EU until July

Donald Trump says he will delay the imposition of 50% tariffs on goods entering the United States from the European Union until July, as the two sides attempt to negotiate a trade deal.

It comes after the president of the European Commission, Ursula von der Leyen, said in a post on social media site X that she had spoken to Mr Trump and expressed that they needed until 9 July to “reach a good deal”.

The US president had last Friday threatened to bring in the 50% tariffs from 1 June, as European leaders said they were ready to respond with their own measures.

But Mr Trump has now said that date has been put back to 9 July to allow more time for negotiations with the 27-member bloc, with the phone call appearing to smooth over tensions for now at least.

Speaking on Sunday before boarding Air Force One for Washington DC, Mr Trump told reporters that he had spoken to Ms Von der Leyen and she “wants to get down to serious negotiations” and she vowed to “rapidly get together and see if we can work something out”.

The US president, in comments on his Truth Social platform, had reignited fears last Friday of a trade war between the two powers when he said talks were “going nowhere” and the bloc was “very difficult to deal with”.

Mr Trump told the media in Morristown, New Jersey, on Sunday that Ms Von der Leyen “just called me… and she asked for an extension in the June 1st date. And she said she wants to get down to serious negotiation”.

More on Donald Trump

“We had a very nice call and I agreed to move it. I believe July 9th would be the date. That was the date she requested. She said we will rapidly get together and see if we can work something out,” the US president added.

Follow the World
Follow the World

Listen to The World with Richard Engel and Yalda Hakim every Wednesday

Tap to follow

Shortly after, he wrote on Truth Social: “I agreed to the extension – July 9, 2025 – It was my privilege to do so.”

On his so-called “liberation day” last month, Mr Trump unleashed tariffs on many of America’s trade partners. But since then he’s backed down in a spiralling tit-for-tat tariff face-off with China, and struck a deal with the UK.

Read more from Sky News:
Gail’s backer plots rare move with bid for steak chain Flat Iron
AA owners line up banks to steer path towards £4.5bn exit

Please use Chrome browser for a more accessible video player

12 May: US and China reach agreement on tariffs

Much of his most incendiary rhetoric on trade has been directed at Brussels, though, even going as far as to claim the EU was created to rip the US off.

Responding to his 50% tariff threat, EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.

“We stand ready to defend our interests.”

Continue Reading

Trending