From the UK Telegraph:

  • Sterling is “overvalued” and this may hamper efforts to rebalance the British economy, the International Monetary Fund has warned the Chancellor
  • In an otherwise-optimistic annual assessment of the UK economy, the IMF told George Osborne that the pound was 5pc to 10pc overvalued – could hit exporters and take some of the steam out of the improving economy – the fastest growing among the world’s largest countries, according to the fund
  • The IMF team agreed that the Bank of England’s ultra-loose monetary policy was the right course at present but warned interest rates may have to rise if inflation starts to increase
  • Highlighted the “particular importance of clear communications” in how the Bank reached its decisions, suggesting there was room for improvement in Govenor Mark Carney’s controversial policy of “forward guidance”

More at: The pound is overvalued, warns the IMF

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I expect Mike will cough up his morning’s corn flakes when he reads this …