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Britain requires further monetary easing to aid the economy and Chancellor of the Exchequer George Osborne should prepare for temporary tax cuts, the International Monetary Fund said.

With the economy mired in its first double-dip recession since the 1970s, the Bank of England and the Treasury should introduce policies to underpin demand and unclog the financial system, the Washington-based lender said in its annual review of the U.K. published today. The central bank needs to inject further stimulus through bond purchases or by cutting interest rates, with tax cuts following as soon as the fall, it said.

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U.S. investors were set to hold steady at Tuesday’s open, awaiting new reports on manufacturing, auto sales and corporate results for clues about the strength of the U.S. economy.

The Dow Jones industrial average (), S&P 500 () and Nasdaq () futures were all little changed. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

On tap for Tuesday are new readings on manufacturing, construction spending and auto sales. Investors will be searching for signs to assuage concerns that the recovery in the U.S. economy may be stalling.

The latest round of corporate results include reports from BP () and Pfizer (, Fortune 500).

U.S. stocks finished in the red Monday, ending a mostly sour month on a weak note. Following three months of solid gains, all three major U.S. indexes posted their worst monthly returns of the year in April.

Resurfacing concerns about Europe and a possible hard landing in China have helped put a brake on the momentum from earlier this year.

A report on manufacturing in China rose slightly, which could help allay concerns about the economy slowing too quickly.

Meanwhile, Australia’s central bank announced it was cutting its key interest rate by 0.5 percentage point to 3.75%, due to below trend growth both in Australia and globally. It was the bank’s biggest rate cut since February 2009, when global financial markets were still in near free fall.

On Monday, Spain’s government said its economy declined for the second straight quarter, revealing that the nation is in recession. The report came with Spanish bond yields still at perilously high levels, and just days after Standard and Poor’s downgraded the country’s credit rating.

World markets: Britain’s FTSE 100 () edged higher 0.4% in midday trading. Markets in Paris and Frankfurt were closed for the May Day holiday.

Japan’s Nikkei () ended down 1.8%, while markets in Hong Kong and Shanghai were closed for the holiday.

Economy: The April installment of the Institute for Supply Management manufacturing Index is expected to come in at 53, down from 53.4 in March, according to a survey of analysts by Briefing.com. Any reading above 50 still indicates growth in the sector that has helped to lead the U.S. economic recovery.

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April U.S. auto sales are forecast to be up to a seasonally-adjusted annual sales pace of about 14.3 million vehicles. That would be a rise from the year-ago rate of 13.4 million, but down from March sales’ pace of 14.7 million.

U.S. automakers General Motors (, Fortune 500) and Ford Motor (, Fortune 500) are both forecast to report lower sales.

March construction spending is expected to have risen by 0.5%, according to economists’ estimates.

Companies: Oil company BP posted a drop in quarterly earnings to $1.52 a share from $1.76 a year earlier, missing estimates of analysts surveyed by Thomson Reuters. BP joined Exxon Mobil (, Fortune 500) and ConocoPhillips (, Fortune 500) as major oil companies to miss forecasts for the first quarter. Shares of BP lost 2.8% in premarket trading.

Drugmaker Pfizer (, Fortune 500), a Dow component, reported earnings of 58 cents a share for the first quarter, down from 60 cents a share a year earlier but 2 cents better than forecasts. Shares of Pfizer slipped 0.7% in premarket trading.

Delta Air Lines (, Fortune 500) announced plans Monday to purchase an oil refinery outside of Philadelphia, a novel approach to reducing its fuel costs. Shares gained 1.7% in premarket trading.

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Currencies and commodities: The dollar lost ground slightly against the euro, but gained on the British pound and Japanese yen.

Oil for June delivery lost 30 cents to $104.57 a barrel.

Gold futures for June delivery fell $1.50 to $1,662.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged higher, but the yield was little changed at 1.91%.  

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Swedish retail sales unexpectedly rose for a sixth month in March as lower interest rates and falling unemployment fueled consumer confidence.

Sales rose a monthly 0.2 percent and climbed an annual 4.5 percent, compared with 3.5 percent the previous month, Stockholm-based Statistics Sweden said today. The median estimate in a survey of six economists by Bloomberg was for a monthly drop of 0.3 percent and an annual gain of 3.4 percent.

U.S. Treasury Secretary Timothy F. Geithner warned Congress against repeating last year

Signs bearing a skull and crossbones dot the banks of a reservoir and canal near this town on the U.S.-Mexico border, but the fishermen standing in the reeds nearby ignore them, casually reeling in fish that are contaminated with toxic chemicals and banned for human consumption.

Some do it to quell their hunger, others to make some cash by selling the carp, catfish and gar in nearby neighborhoods.

“It’s a great little lake,” says Joe Garcia, 43, among those fishing here one day recently, where a carp with the highest levels of toxic PCB chemicals ever tested in a fish was caught years ago. He says he throws back his catch but a lot of others here can’t afford to pass up the meal.

The reservoir is one of thousands of sites along the U.S.-Mexico border where industry, pesticide use and population growth left hazards in past decades that still await solutions. Donna is among the worst _earning a place on the Environmental Protection Agency’s priority list _ and illustrates how slowly the government cleanup process moves and how those struggling for subsistence in poor areas like this sometimes do not wait.

Four years after the site made the priority list, the EPA plans to begin soon extensive sampling of the water, sediment and fish that could become the foundation for a cleanup plan.

But with limited funds and an elaborate process, the effort could take years, leaving authorities to educate a population that is often more concerned with daily survival than warnings of potential problems. Donna reservoir is surrounded by fields of swaying sugarcane and green leafy rows of celery. Workers who toil in migrant agriculture live in sparse neighborhoods of trailer homes and campers that border the canal. Some stubbornly believe they can cook the chemicals out of the fish, state environmental officials say.

“They just don’t tend to pay attention to that (sign),” said Juan Salazar, 41, who became so frustrated by the fishermen crossing his yard to reach the water that he erected a small fence.

“There are too many low-income families here that may make a living selling this stuff.”

State and federal officials have repeatedly gone door-to-door to warn residents since PCB contamination was discovered in 1993. Twice federal authorities used electric charges to kill more than 35,000 fish in the reservoir and the 6 1/2-mile canal that brings water from the Rio Grande. But the fish _ at least 22 species, including tilapia and largemouth bass _ repopulate.

Every day, people are drawn to the tranquil scene, where birds feed along the shores and fish constantly break the surface. Officials believe many area residents fish there to supplement their diet. But in the fatty tissue of the fish are polychlorinated biphenyls or PCBs, an industrial residue apparently emanating from something dumped in the canal years ago. Officials say it could be a submerged piece of machinery but haven’t been able to find it.

PCBs, typically found as oily liquids in electrical equipment, have been banned in the U.S. since 1979 after causing cancer in animal testing. Researchers believe the chemicals can lead to lower birth weights, suppress the immune system and increase the risk of cancer.

A carp caught in the Donna canal 19 years ago contained more than 1,500 times the limit of PCBs believed safe, the highest such reading ever. Members of the family who ate it had elevated PCB levels in their blood. Readings taken since then in the lake have been lower but still in the hazardous range.

However, the health impact on those eating Donna reservoir fish is unknown because no health survey has been conducted. A 2010 study by Texas Department of State Health Services estimated nearly 4,000 people living within a one-mile radius.

The EPA is planning a community meeting in late March to begin the process that could lead to a cleanup plan. One of the best-known PCB cleanup efforts _ on a much larger scale _ continues in New York’s Hudson River more than 27 years after it made the priority list. Tons of sediment have been dredged from the riverbed.

Though nearly a dozen people were interviewed near the reservoir for this story, only one admitted to eating the fish he caught, but he then declined to speak further _ there is a $500 fine for taking the fish, but not if you throw them back.

Officials said some men in the area tend to shrug off the danger but women have been more receptive. Rafael Casanova, EPA project manager, said a pregnant woman he talked to during a local canvas told him she had bought lake fish from someone selling it in the neighborhood.

When he described the health danger, “She was very impressed by that,” he said. “I felt good about that one.”

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Can the market sustain its rally, or will prospects of a Greek default shatter investors’ risk appetite?

The Dow Jones Industrial Average () closed at its highest level since 2008 Friday. For the year, the Dow is up almost 6%, and the S&P 500 () is up more than 8%. The Nasdaq () has made an impressive 13% run.

Yet, the possibility of a Greek default looms large over world markets. European finance ministers will meet Monday, and are expected to sign off on Greece’s latest economic reform proposal.

Greece needs that sign off from Europe’s finance ministers to avoid defaulting on a €14.5 billion bond payment due March 20. Another delay is unlikely to rattle the markets, but if it becomes clear that Greece will default, markets strategists fear a sharp sell-off.

"Markets have priced in a positive outcome," said Joseph Tanious, global market strategist at J.P. Morgan Asset Management.

All three indexes posted solid gains for the week, as investors largely ignored concerns over Greece and focused squarely on better-than-expected economic reports in the United States. The S&P was up 1.4%.

With few key economic reports on the agenda this week, and U.S. markets closed Monday in observance of Presidents’ Day, investors will keep an eye on quarterly earnings from major retailers to assess the health of the American consumer fast payday loan no faxing.

"There will be a heightened sensitivity to retailers and their earnings to either confirm that the U.S. economy is picking up and recovering or cast a doubt on the consumer’s appetite," said Tanious.

On Tuesday, retailers Barnes & Noble (, Fortune 500), Home Depot (, Fortune 500), Macy’s (, Fortune 500), Wal-Mart (, Fortune 500) and Saks () will report quarterly results.

On Thursday, Kohl’s, Sears (, Fortune 500), Target (, Fortune 500) and Gap (, Fortune 500) will report.

On Friday, J.C. Penney (, Fortune 500) will release its earnings.

Other quarterly earnings due out next week include Dell (, Fortune 500) and Kraft (, Fortune 500) on Tuesday and Hewlett-Packard (, Fortune 500) on Wednesday

Meanwhile, investors will continue to monitor developments in Iran to determine whether concerns over the country’s nuclear program will drive up the price of oil.

U.S. crude oil rose 3% last week to close at $102.35, and economists worry that further increases in oil prices could threaten the global economy.

"I’m watching oil with trepidation," said Ram Bhagavatula, partner at the hedge fund Combinatorics Capital. "It’s the one thing that could threaten the recovery." 

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European Central Bank President Mario Draghi

Spain’s Parliament approved the new conservative government’s first austerity measures Wednesday, which aim to rein in the country’s swollen deficit with euro8.9 billion ($11.5 billion) in spending cuts.

The measures, which also include income and property tax hikes, were approved by 197 deputies in the 350-seat lower house, where the ruling Popular Party has an absolute majority of 185 seats after a landslide election win in November.

Finance Minister Cristobal Montoro said the measures were severe but necessary, owing to what he called the mismanagement of the economy by the former Socialist government.

“The economy is stopped, we’re on the verge of a recession and the accounts are unbalanced as a consequence, among other things, of the deplorable decisions taken by the former government, which only made the situation worse,” Montoro told lawmakers.

Spain is battling to avert being dragged further into a debt crisis that has already forced Greece, Ireland and Portugal to seek financial bailouts.

In 2010, Spain began to emerge from a near two-year recession triggered by the collapse of a property and construction bubble that had fueled growth for nearly a decade. The country now has a 21.5 percent unemployment rate _ the highest in the eurozone _ and Economy Minister Luis de Guindos said recently the economy would slide back into recession early this year with the last quarter of 2011 and the first of 2012 both registering negative growth.

Montoro accused the former Socialist government of deliberately hiding figures that showed that Spain’s deficit for 2011 would be 8 percent of national income, and not 6 percent as the Socialists had claimed easy to get unsecured personal loans. He said the deviation represented an estimated euro20 billion ($25.4 billion) “black hole.”

However, Prime Minister Mariano Rajoy has acknowledged that the deficit of regional governments, most of which are run by his own conservative party, was responsible for 75 percent of the deviation.

Other measures in the austerity package include a freeze on civil servants’ salaries and on practically all government hiring. Pensions, however, are to be increased by 1 percent, the only area of spending to rise. Taxes on income and property will also be raised but only for two years.

Treasury Minister Cristobal Montoro said the tax increases will be progressive, with the wealthiest paying more and that the impact on lower-income earners will be minimal.

The government projects that the tax increases will bring in euro6.2 billion ($7.9 billion) on top of the euro8.9 billion saved on the spending cuts.

The package was part of an extension of the 2011 budget because the last government did not pass one for 2012. More austerity measures are expected when the government presents its 2012 budget by the end of March.

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President Barack Obama, saying he