Belfast Telegraph

IMF raises UK growth forecast for year ahead

By John-Paul Ford Rojas

The International Monetary Fund (IMF) has lifted its growth forecast for the UK this year to 2.4% in a fresh boost for Chancellor George Osborne.

Its latest prediction, a sharp upgrade from a previous figure of 1.9%, would see the region among the fastest-growing of the world's advanced economies.

The World Economic Outlook puts the UK's pace of expansion ahead of European rivals including Germany and France, though behind the US on 2.8%.

It forecasts that growth for 2013 will have come in at 1.7% and that after recording 2.4% this year, it will slow to 2.2% in 2015.

The figures are in line with the latest forecasts from Britain's independent Office for Budget for Responsibility (OBR), published at the time of Mr Osborne's Autumn Statement last month.

The IMF report said: "Activity in the United Kingdom has been buoyed by easier credit conditions and increased confidence."

But the report said "economic slack" – spare capacity left in the economy which can be measured by factors such as unemployment – would remain high.

The report's reference to credit comes after households' access to finance was boosted by initiatives such as the Funding for Lending scheme and Help to Buy. But conditions for small business borrowing, seen as key to economic health, have not kept pace.

The IMF forecasts that the world economy will grow by 3.7% in 2014, up from 3.6% in its last forecast, though risks remain.

However, advanced economies remained well off their peak, the fund warned.

Belfast Telegraph

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