IMF chief Christine Lagarde calls for decisive action on jobless rate from world leaders

IMF chief Christine Lagarde has called for decisive action from world leaders to put an end to uncertainties over global economy that were prolonging "terrifying and unacceptable" levels of unemployment.

Speaking only days following the slashing of its global growth forecasts for this year and the next, Lagarde said the economic weakness was not just a result of ''tail risks'' such as a eurozone break-up but ''the degree of uncertainty in many corners of the world – whether it is Europe or America''.

She said it was deterring investors from investing and creating jobs. She added, action was needed to lift the veil of uncertainty.

Reiterating the softening of the IMF's position on austerity, she said governments no longer needed to pursue specific debt reduction targets but focus on implementing reforms.

She said if borrowing rose as a direct result of growth-sapping measures, the IMF now thought it should be tolerated rather than addressed with even more tax rises or spending cuts.

She said the IMF did not think it was sensible to stick to nominal targets. She added it was much more sensible to apply measures and let the stabilisers operate.