On Monday, the British pound fell to an all-time low of $1.0384 against the US dollar in light of UK Prime Minister Liz Truss's tax-cutting plans.
"I think the situation in Europe and the UK is very difficult right now," Deese said on Tuesday. "It is and is going to be a tough period for the UK and for the European Union over the course of the next several months."
He said the UK and EU are more exposed to energy volatility and do not have some of the incumbent strengths that the US does economically, he added.
On Friday, UK Chancellor of the Exchequer Kwazi Kwarteng announced a 45 billion pound ($48 billion) tax-cutting package that would benefit the highest earners most, causing concern about unsustainable government borrowing.
The International Monetary Fund (IMF) in a statement to Sputnik on Tuesday said the fund is closely following reports about concerning economic developments in the British economy and currently engaged with UK authorities about the matter.