The International Monetary Fund has upgraded its growth forecasts for the UK by more than any other advanced economy in an embarrassing u-turn for the global financial institution.
Britain is now expected to grow by 1.4pc this year, double the rate projected in April when IMF chief economist Olivier Blanchard singled the UK out for criticism and accused George Osborne of “playing with fire” with his austerity programme.
The following month, the Fund urged him to borrow as much as £10bn this year to pay for infrastructure investment and business tax cuts in an attempt to boost growth.
The IMF appeared to moderate its position in its World Economic Outlook, saying that “public investment can be brought forward to offset the drag from near-term fiscal tightening, while staying within the medium term fiscal framework”. In May, it said action was “essential”.
Instead, it acknowledged the UK’s sharp turnaround, saying: “Recent data have shown welcome signs of an improving economy, consistent with increasing consumer and business confidence.’