Britain 'could do better' in tackling its huge debt

The Chancellor's plans to reduce huge government debt and breathe life into the economy are, in fact, holding the economy back. The latest verdict from the International Monetary Fund is the result of a two week visit by its economists to the UK and is the most forthright criticism yet of Mr Osborne's austerity.

The IMF does welcome the flexibility Mr Osborne has shown in extending the deadline for starting to bring the overall level of debt down and it says his medium term plans have won him the credibility he needs in markets to keep our borrowing costs down.

However, there is room to relax the pace of austerity and, crucially, to spend on infrastructure - especially in transport and energy.

IMF report recommends spending in some areas Credit: Press Association

Streamlining the planning process could help attract private money and he could also alter taxes to encourage businesses to invest as well - and alter VAT to help pay for that.

The Chancellor has been keen to highlight schemes he's introducing such as 'Help To Buy' which he hopes will boost confidence in the housing market. The IMF agrees but says that this may be short-lived while the number of new houses being built remains small.

In fact it could have the very opposite effect he wants by boosting house prices even further out of reach of people not yet on the housing ladder.

Last month the IMF also said economic weakness had lasted too long Credit: Press Association

The Chancellor should consider introducing taxes to punish owning land without developing it.

In short, the report from the IMF is encouraging but with some pointed and less-diplomatic suggestions for the Chancellor to help speed up any recovery.

In three words: could do better.