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IMF raises UK growth forecast to 2.4% IMF raises UK growth forecast to 2.4%
(about 1 hour later)
The International Monetary Fund has raised the UK's growth forecast for 2014 in a fresh boost for George Osborne.The International Monetary Fund has raised the UK's growth forecast for 2014 in a fresh boost for George Osborne.
The organisation said the UK economy will now grow 2.4% this year - up from its previous estimate of 1.9%. The revised growth figure is higher than any other major European country. The organisation said the UK economy will now grow 2.4% this
The announcement gives the Bank of England more leeway to keep its foot firmly pressed on the economic accelerator until a recovery is established without fuelling inflation. year - up from its previous estimate of 1.9%. The revised growth
The renewed optimism on the UK marks a shift from a year ago when the IMF’s chief economist Olivier Blanchard warned that the Chancellor was “playing with fire”. figure is higher than any other major European country.
But in opening remarks presented with the IMF's update, Mr Blanchard described the global recovery as “weak and uneven” as the US outstrips Europe and core eurozone countries such as Germany outstrip strugglers like Spain and Italy. “In most advanced economies, unemployment remains much too high,” he added. The announcement gives the Bank of England more leeway to keep
The IMF also warned advanced economies should "avoid a premature withdrawal of monetary policy accommodation… as output gaps are still large while inflation is still low”. its foot firmly pressed on the economic accelerator until a
The IMF is concerned over the potential threat of deflation in the eurozone, while inflation is well below target at 0.8%. IMF managing director Christine Lagarde has called falling prices “an ogre that must be fought decisively” and the body added the European Central Bank may need to consider “additional measures” to ward off concerns. recovery is established without fuelling inflation.
Blanchard added: “Deflation means higher real interest rates, higher public and private debt burdens, and further deflation pressure. To avoid that risk, accommodative monetary policy remains of the essence.” The renewed optimism on the UK marks a shift from a year ago
The other risk flagged up by the IMF is the West’s eventual move away from emergency monetary policy, underlined by the US Federal Reserve set to vote for further tapering of its quantitative easing programme next week. when the IMF’s chief economist Olivier Blanchard warned that the
Billions have been pulled out of emerging markets, potentially destabilising their economies. Chancellor was “playing with fire”.
“Clear communication by advanced economies’ central banks, and stronger domestic policies in some emerging markets, are both essential to reduce this risk,” Blanchard added. But in opening remarks presented with the IMF's update, Mr
Blanchard described the global recovery as “weak and uneven” as the
US outstrips Europe and core eurozone countries such as Germany
outstrip strugglers like Spain and Italy. “In most advanced
economies, unemployment remains much too high,” he added.
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The IMF also warned advanced economies should "avoid a premature
withdrawal of monetary policy accommodation… as output gaps are
still large while inflation is still low”.
The IMF is concerned over the potential threat of deflation in
the eurozone, while inflation is well below target at 0.8%. IMF
managing director Christine Lagarde has called falling prices “an
ogre that must be fought decisively” and the body added the
European Central Bank may need to consider “additional measures” to
ward off concerns.
Blanchard added: “Deflation means higher real interest rates,
higher public and private debt burdens, and further deflation
pressure. To avoid that risk, accommodative monetary policy remains
of the essence.”
The other risk flagged up by the IMF is the West’s eventual move
away from emergency monetary policy, underlined by the US Federal
Reserve set to vote for further tapering of its quantitative easing
programme next week.
Billions have been pulled out of emerging markets, potentially
destabilising their economies.
“Clear communication by advanced economies’ central banks, and
stronger domestic policies in some emerging markets, are both
essential to reduce this risk,” Blanchard added.