- 3 updates
The International Monetary Fund (IMF) said British hopes for an export-led economic recovery are being hit as "declining productivity growth and high unit labour costs are holding back much needed external rebalancing".
The IMF suggested alternatives policy responses as it slashed the UK's growth forecasts for this year and the next.
Its report stated:
The International Monetary Fund (IMF) has suggested Chancellor George Osborne should consider changing his austerity plans in the light of "lacklustre" private demand.
In its World Economic Outlook report, the IMF also suggested further action should be taken on monetary policy, potentially including the purchase of private sector assets.
"In the United Kingdom, the recovery is progressing slowly, notably in the context of weak external demand and ongoing fiscal consolidation", the report states.
The IMF noted that rebalancing from the public to private sector was "being held back by deleveraging, tight credit conditions and economic uncertainty".
The International Monetary Fund (IMF) has slashed the UK's growth forecasts for 2013 and 2014 and warned that the private sector is being hampered by a lack of credit and economic uncertainty.
The IMF cut this year's forecast growth from one percent to 0.7 percent, while cutting the projection for 2014 from 1.9 percent to 1.5 percent.
The body noted that the UK's financial recovery was "progressing slowly".