The International Monetary Fund has warned the UK recovery has ‘stalled’ over the last three quarters, largely due to spikes in commodity prices. Ajai Chopra, the IMF mission chief to the UK said although transitory factors like the rising commodity prices and VAT hike at the start of the year has contributed to the slowing growth, he said it is difficult to forecast potential ‘shocks’ or reasons for a slowdown in the months ahead. He said: ‘So the tough economic judgment that we face and that the UK authorities face is to determine whether expected growth is likely to be weak enough to require a policy response. ‘And here our answer is that we do expect growth to pick up a bit in the coming quarters, and over the medium term we expect growth to reach 2.5% or thereabouts.’ He added: ‘At this point, we do not see a need to implement any contingency plans. As I said, much of the unexpected weakness in growth has been due to supply side factors. And these cannot be addressed with conventional demand management.’However, Chopra conceded the pace of the UK’s recovery will be moderate, with headwinds from fiscal consolidation, a soft housing market and the ongoing process of balance sheet repair among households and banks. Conversely, he said although growth and inflation have been less than expected in recent quarters, he believes both of these factors will improve over time. He added in terms of the UK’s macroeconomic policy setting, the current arrangement of fiscal and monetary policy is appropriate to remain in place. ‘The overall macroeconomic policy stance balances the downside risks to growth, and the upside risks to inflation,’ he added. ‘Further, the mix of tight fiscal and accommodative monetary policy will support economic rebalancing to a more sustainable equilibrium by keeping real interest rates low and sterling competitive.’