The IMF urged the Italian government late on Tuesday to “continue pursuing fiscal consolidation”, stressing that it should cut its budget deficit to below three percent of GDP by 2012 through “decisive implementation”.

Italy is hoping to approve a €40bn austerity plan by Sunday in an attempt to stabilise its budget and restore confidence in markets.

The statement by the IMF comes as concerns continue to mount that Italy could become the next European country to be affected by the debt crisis after both Portugal and Greece required a bailout from the IMF, ECB and EU.

The fund stated in its annual assessment of Italy’s economy: “Decisive implementation of the package is key and a number of IMF directors felt that more frontloaded spending measures would have a positive effect on market sentiments.”

The UK’s Department of Energy and Climate Change declared in its White Paper late on Tuesday that energy bills will rise by around £160 a year by 2030 to fund a planned shake-up of the country’s power supply market. The figure relies on households cutting their energy use by 30 percent over the same period, something that consumers may find difficult to achieve.

Regulator Ofgem calculates that the plans will cost more than £200bn by 2020 and indicated an estimated 52 percent rise in bills, equivalent to about £600 per year.

Energy Secretary Chris Huhne outlined measures which encourage energy companies to make extensive investments of up to £110bn into both nuclear and renewable energy at the expense of soaring energy bills to consumers.

The change in the way Britain will organise its new electricity production is an attempt to combat climate change, ensure security of energy supply and reduce high bills for consumers in the long-term, said the government.

The plan is to move away from fossil fuels to aid carbon emissions reduction, and to meet both UK and EU emissions targets. As part of the plan the White Paper outlined the construction of new wind turbines, tidal power stations and new nuclear plants to substitute existing ones.