Washington (AFP) - The International Monetary Fund announced Tuesday that Britain's almost complete retraction of its mini-budget based on borrowing reflects the country's commitment to "fiscal discipline", after the agency called last week on the United Kingdom to adopt consistent policies.

"The positions recently announced by the UK authorities are an indication of commitment to fiscal discipline and contribute to a better alignment of fiscal and monetary policy to combat inflation," a statement from the IMF spokesman said.

On Monday, the British government reversed the overwhelming majority of its tax-cutting measures as part of a debt-financed plan.

On Tuesday, British Prime Minister Liz Terrace acknowledged that her government had "exaggerated and rushed" in announcing its mini-budget.

The IMF issued a strongly worded statement calling on the British government to rectify the situation.

"Given high inflationary pressures in several countries, including Britain, we do not recommend unfunded major arbitrage measures because it is important that fiscal policy does not get in the way of monetary policy," said a previous statement from the International Finance Corporation.