The International Monetary Fund expressed approval of British Chancellor George Osborne's austerity measures but suggested the government cut taxes if its economy fails to improve.

While the global economic watchdog said it expects a "moderate" recovery in Britain, it is also concerned the United Kingdom might encounter some serious bumps in the road.

Should that happen, the agency says tax cuts for businesses and individuals would be a better move than increasing government spending. 

The IMF's advice comes amid fears the UK's rate of deficit reduction is jeopardizing the nation's economic recovery.