IMF: UK growth ‘to outstrip other leading economies’

The IMF’s World Economic Outlook predicts that the United States will grow by 1.7 per cent this year, Germany by 1.9 per cent and Canada by 2.2 per cent.

As well as the 0.4 per cent upgrade to its April forecast for this year, the IMF has added 0.2 per cent to its prediction for 2015, meaning the UK should grow by 2.7 per cent next year.

That compares with 2015 growth estimates of 3 per cent in the US and 2.4 per cent in Canada.

Last year the body said the UK would grow by just 1.5 per cent in 2014, but the recovery has been boosted by consumer spending and a tentative rebound in the manufacturing sector.

Figures from the Office of National Statistics due to be published on Friday are expected to show the UK economy has recovered to pre-recession levels, with growth of 0.8 per cent due in the second quarter of the year.

‘Job not yet done’

Despite slow wage growth and the prospect of higher interest rates could hamper the recovery.

Chancellor George Osborne said: “Today the IMF has upgraded their 2014 forecast for the UK by more than any other major economy.

“The government’s long-term economic plan is working. But the job is not yet done and so we will go on making the assessment of what needs to be done to secure a brighter economic future.”

The IMF rounded down growth for the global economy from 3.7 per cent in April to 3.4 per cent today.

‘Weak recovery’

IMF director Olivier Blanchard said: “The recovery continues, but it remains a weak recovery.”

TUC general secretary Frances O’Grady said: “Pay packets are still falling behind rising prices, so most people are not yet sharing in the recovery.

“If the good news on growth is going to last, real wages must start improving too.

“Businesses can only grow if customers have more money in their pockets, which means that Britain needs a pay rise.”