LONDON (AP) — Britain’s economy risks suffering permanent damage, the International Monetary Fund warned Thursday as it called on the Bank of England to cut rates and the U.K. government to step up public investment and potentially relax its austerity measures.

In its annual report on the country, the IMF suggested that the Bank of England may need to cut its base interest rate even lower than 0.5 percent, the all-time low which has been in place since March 2009.