IMF raises its forecast for UK economy

By Hamish Champ

- Last updated on GMT

Related tags: Uk economy, International monetary fund, Economics, United kingdom, Argentina

The International Monetary Fund (IMF) said today it expects the UK economy to grow faster next year than it previously anticipated. The IMF, the...

The International Monetary Fund (IMF) said today it expects the UK economy to grow faster next year than it previously anticipated.

The IMF, the global organisation which monitors economies around the world and where necessary bails out those in trouble, said its latest World Economic Outlook research was raising its growth projections for the UK economy in 2010 from a 0.7 per cent rise - predicted in July this year - to 0.9 per cent.

The UK is expected to grow faster than the likes of Germany, Italy and Spain, but slower than France, the US and Japan.

Olivier Blanchard, the IMF's chief economist, said the global recovery had already started.

"In most countries growth will be positive for the rest of the year, as well as into 2010," he said.

But Blanchard warned the key to sustaining growth at such levels was dependent on consumer confidence returning and investment strengthening as rising public spending and deficits were "unwound".

"The current numbers should not fool governments into thinking the crisis is over," the economist said, adding that countries should co-ordinate policies "to achieve a global rebalancing and sustain the recovery".

Similarly, public scepticism surrounding bailouts for the very firms considered responsible for the crisis "undercut public support for financial restructuring, which could pave the way for a prolonged period of stagnation", the IMF said.

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