IMF may review policy after ‘getting it wrong’

Analyses showing that the IMF had completely underestimated the effect of austerity on jobs and growth would be considered very carefully, Christine Lagarde, the head of the Washington based body, has said.

She did not say whether the IMF would change its formula for dealing with countries needing a bailout.

Olli Rehn, European economics Commissioner, said he had not yet read the document but said he rated the IMF’s research highly.