The UK government's package of economic support measures enacted during the COVID-19 pandemic to date is one of the best examples of coordinated action seen across the globe to prevent a surge in unemployment and corporate insolvencies, the International Monetary Fund's (IMF) managing director, Kristalina Georgieva, said on Thursday.
"Let me start by recognizing the enormous efforts the UK authorities have made to contain the impact of the pandemic. The unprecedented package of fiscal, monetary, and financial sector support measures has helped to sustain incomes, to keep unemployment down, and curb corporate insolvencies. It is one of the best examples of coordinated action that we have seen globally," Georgieva said at a press briefing.
The IMF's managing director made reference to the government's Coronavirus Job Retention Scheme, which, when introduced this past spring, allowed employees unable to work to receive up to 80 percent of their wages from the government.
The UK government has used its "fiscal space" effectively to support workers and industries, Georgieva stated, adding that such measures should be continued.
"The UK government is fortunate to have fiscal space for action and it has proven over the last months that it is using this fiscal space, leaning forward, but doing it also wisely. What we see are the benefits of active labor policies for the UK. They need to be continued. They made sense before; they continue to make sense now," she said.
From November 1, the UK's Coronavirus Job Retention Scheme will be replaced by the Job Support Scheme, which will allow employees to receive two-thirds of their normal pay for hours not worked.
In the latest edition of the World Economic Outlook, published on October 13, the IMF predicted that the UK's GDP will contract by 9.8 percent in 2020, a slight improvement on the 10.2 percent drop forecast in June.
The UK economy is predicted to recover partially in 2021 with growth of 5.9 percent, according to the IMF forecast.