The International Monetary Fund is urging George Osborne to boost spending on Britain’s infrastructure despite revising upwards its forecast for UK growth by more than for any other developed country.
In a generally downbeat assessment of the state of the global economy, the Washington-based fund said it now expected the pace of expansion to be significantly higher than three months ago.
But it triggered a fresh dispute between Osborne and his Labour shadow Ed Balls over whether the government’s austerity programme had helped or hindered recovery from Britain’s deepest recession of the postwar era.
The fund’s half yearly world economic outlook cut its forecast for global growth in 2013 and 2014, blaming the impact of ham-fisted attempts to cut the budget deficit in the US and a slowdown in top emerging market economies. But it said the UK had bucked the trend, revising its estimates of growth up by 0.5 points to 1.4% in 2013 and by 0.4 points to 1.9% in 2014.
The IMF embarrassed the chancellor in its WEO in April this year, when it called on the UK to ease up on its austerity plans in order to boost the recovery prospects. Although theCity expects growth of about 1% in the third quarter, the fund repeated its call for higher public spending.
via The Guardian
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