Britain’s economy will surge ahead faster than any other major advanced country this year, the International Monetary Fund declared today.
The Washington-based organisation awarded the UK the biggest upgrade to growth of all comparable countries in its quarterly forecasts out this afternoon. It raised this year’s forecast by 0.4 to 2.9 per cent, followed by 2.5 per cent in 2015, an upgrade of 0.3.
The report shows British growth is outstripping the beleaguered eurozone, and comes just a year after IMF chief economist Olivier Blanchard claimed that Chancellor George Osborne was “playing with fire” by sticking to his deficit-reduction strategy.
Mr Osborne was tonight due to arrive in Washington where he will savour his success with a speech lecturing the IMF on the need for countries to tackle their deficits before they can enjoy sustained growth.
But Labour leader Ed Miliband today used a speech in Birmingham to warn that millions of families are suffering from a cost of living crisis that is likely to drag on for years. “People know that this cost of living crisis runs deep,” said Mr Miliband, as he claimed higher growth was failing to reach people’s pockets. “And it is about that break between the prosperity of the country as a whole and their family finances.”
The Labour leader also warned that the country must do more to promote growth in other great cities like Birmingham and Manchester.
“We need a prosperous London,” he said, “but we need to build prosperity outside it too.”
America will grow 2.8 per cent this year and 2.9 next year, but it is the only major advanced economy that will beat Britain’s growth in 2015, the year of the UK general election.
By contrast, Germany is due to grow just 1.7 and 1.6; France by 1.0 and 1.5; Italy by 0.6 and 1.1; and Spain by 0.9 and 1.0. A survey yesterday found finance directors at Britain’s top companies are now more willing to take on risk than at any time since before the recession, boosting investment hopes.
