UNITED KINGDOM Staff Report for the 2009 Article IV Consultation—Informationa Annex

This 2009 Article IV Consultation highlights that economic growth in the United Kingdom has turned sharply negative since mid-2008. Housing prices have fallen by more than 20 percent from their peak, the unemployment rate has increased, and inflation has come down. In response to the crisis, the authorities have taken wide-ranging measures to stabilize the financial system and support demand. Executive Directors have stressed that the most important policy task remains repairing the financial system. Directors have also welcomed the adoption of the Special Resolution Regime for financial institutions.

Abstract

This 2009 Article IV Consultation highlights that economic growth in the United Kingdom has turned sharply negative since mid-2008. Housing prices have fallen by more than 20 percent from their peak, the unemployment rate has increased, and inflation has come down. In response to the crisis, the authorities have taken wide-ranging measures to stabilize the financial system and support demand. Executive Directors have stressed that the most important policy task remains repairing the financial system. Directors have also welcomed the adoption of the Special Resolution Regime for financial institutions.

Annex I. United Kingdom: Fund Relations

(As of May 31, 2009)

I. Membership Status: Joined 12/27/1945: Article VIII

II. General Resources Account:

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III. SDR Department:

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IV. Outstanding Purchases and Loans: None

V. Financial Arrangements: None

VI. Projected Obligation to Fund: (SDR million; based on present holdings of SDRs):

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VII. Exchange Rate Arrangement:

The U.K. authorities maintain a free floating regime. As of June 23, 2009 the exchange rate for sterling was $1.63. In accordance with UN resolutions and EU restrictive measures, the United Kingdom applies targeted financial sanctions under legislation relating to Al-Qaeda and Taliban, and individuals, groups, and organizations associated with terrorism; and certain persons associated with: the former Government of Iraq, the former Government of Liberia, the current Government of Burma (aka Myanmar), the former Government of the Republic of Yugoslavia and International Criminal Tribunal Indietees, the current Government of Zimbabwe, the current government of Belarus, the current government of North Korea; the current government of Iran and persons considered to be a threat to peace and reconciliation in Sudan, Cote d’Ivoire, and Democratic Republic of Congo; and persons considered by the UN to have been involved in the assassination of former Lebanese Prime Minister Rafik Hariri. These restrictions have been notified to the Fund under Decision 144–(52/51).

VIII. Article IV Consultation:

Discussions for the 2009 Article IV consultation were conducted in London during May 7–20, 2009. The Staff Report (IMF Country Report) was considered by the Executive Board on July 10, 2009.

IX. FSAP

The FSAP was completed at the time of the 2002 Article IV Consultation.

X. Technical Assistance: None

XI. Resident Representative: None

United Kingdom: 2009 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for United Kingdom
Author: International Monetary Fund