By Andrea Shalal

WASHINGTON27 Sep – UK tax action is likely to increase inequality, a spokesman for the International Monetary Fund said on Tuesday, urging authorities to consider providing more targeted support to affected families and businesses.

“We are closely monitoring recent economic developments in the UK and are engaging with the authorities,” the spokesman said, responding to questions from Reuters after sterling hit a record low amid growing concerns in markets.

“Given increasing inflationary pressures in many countries, including the UK, we do not recommend a large untargeted fiscal package at this time, as it is important that fiscal policy does not conflict with monetary policy,” the spokesman said. IMF.

Britain’s new finance minister Kwasi Kwarteng sent sterling and government bonds in free fall on Friday with a budget aimed at growing the economy by cutting taxes and a sharp increase in government borrowing.

Kwarteng responded by saying he would set out a medium-term debt reduction plan by November 23, along with estimates from the independent Budget Responsibility Office on full-scale public borrowing.

It IMF understands that the UK’s “sizable tax package” is meant to help residents deal with higher energy prices and boost growth through tax cuts and supply-side measures, but that such measures could put fiscal policy at odds with monetary policy, a spokesperson said that.

Kwarteng’s November 23 budget will provide “an early opportunity for the UK Government to consider ways to provide more targeted support and re-evaluate tax measures, particularly those that benefit high-income people,” the spokesperson added.