IMF upgrades its forecast for growth in UK

Tim Wallace
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THE IMF upgraded the UK’s GDP growth forecast yesterday, arguing that the strong deficit reduction plan was boosting confidence in the country, as it said the global outlook was also improving.

UK growth should now come in at 0.8 per cent this year, the International Monetary Fund said, a 0.2 percentage point rise on January’s predictions.

The world’s growth is forecast to hit 3.5 per cent, though the recovery remains “fragile,” not least because of the ongoing risk of a relapse in the Eurozone’s sovereign debt crisis.

The Eurozone’s outlook was also upgraded, though a 0.3 per cent fall in GDP is still expected.

Underlining the weakness of the Eurozone’s economy, the IMF described the recent boost from the European Central Bank’s €1 trillion in cheap loans to banks as only helping “temporarily.”

Countries were also warned against implementing excessively harsh austerity programmes.