UK growth forecast cut by IMF

The UK's growth forecasts for this year and next have been slashed by the International Monetary Fund. It says the private sector is being hampered by a lack of credit and economic uncertainty.

IMF: British hopes for export-led recovery 'being hit'

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:

In the United Kingdom, other forms of monetary easing could be considered, including the purchase of private sector assets and greater transparency on the likely future monetary stance.

Greater near-term flexibility in the path of fiscal adjustment should be considered in the light of lacklustre private demand.

Osborne urged to consider changing austerity plans

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.

Chancellor George Osborne.
Chancellor George Osborne. Credit: Stefan Wermuth/PA Wire

"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".

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UK's growth forecasts slashed by IMF

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".