Renewed fears for Greece as it fails to entice a buyer for its biggest gas company. The beleaguered government sorely needs the money.
The IMF says plans to reduce government debt are holding the economy back. It's the most forthright criticism yet of Osborne's austerity.
The Chancellor has defended his recession-busting approach, and his record on taxing the rich, on the sidelines of the IMF meeting in Tokyo.
Chancellor George Osborne has welcomed the IMF's upgrading of Britain's economic growth forecast, adding the coalition's plan is delivering "economic security for the hard working people of this country".
He said: "We've had two pieces of good news today, first that the IMF have upgraded the British growth forecast by more than any other country and also good numbers in manufacturing."
He added: "I think that shows there is clear evidence that by working through our plan, by avoiding the quick fixes and easy options we're delivering economic security for the hard working people of this country."
Responding to the IMF's raising of Britain's growth forecast, Deputy Prime Minister Nick Clegg has tweeted:
Nick Clegg on IMF forecast: This is a great boost for British businesses... this government has set Britain on the right course
Nick Clegg: We must continue to reform, it will be done fairly with investment in jobs; putting money in the pockets of ordinary people #IMF
Responding to the IMF's decision to raise Britain's growth forecast, shadow chancellor Ed Balls said the move was both "welcome and long overdue."
He added: "But this is the slowest recovery for 100 years and working people are facing a cost-of-living crisis with real wages now down £1,600 a year under David Cameron.
"With business investment still weak and the IMF forecasting that UK growth will slow down again next year, it's clear that this is not yet a recovery that is built to last."
The World Economic Outlook has put the UK's pace of expansion ahead of European rivals including Germany and France, though behind the US on 2.8%.
It forecasts that growth for 2013 will have come in at 1.7% and that after recording 2.4% this year, it will slow to 2.2% in 2015.
The figures are in line with the latest forecasts from Britain's independent Office for Budget for Responsibility (OBR), published at the time of Mr Osborne's Autumn Statement last month.
The IMF report said: "Activity in the United Kingdom has been buoyed by easier credit conditions and increased confidence."
But the report said "economic slack" - spare capacity left in the economy which can be measured by factors such as unemployment - would remain high.
Prime Minister David Cameron has trumpeted Britain's economic prospects after the IMF raised its growth forecast to 2.4 per cent in 2014, from 1.9 per cent in October.
The IMF has increased its global growth forecasts for the first time in nearly two years today amid rising demand and production in advanced economies, which have improved compared to emerging markets.
This is a powerful statement of confidence in Britain's economy. The IMF has doubled its forecast for UK growth this year and further raised its predictions for 2014.
Crucially, since July, the UK forecast has improved above all other G7 countries as our industries forge ahead in global markets.
– Nick Clegg, Deputy Prime Minister
This Government has set Britain on the right course by repairing the country's finances and helping to create over a million jobs.
We must continue to work hard to build a stronger economy and do it fairly - with investment in jobs and measures such as the increased personal tax allowance putting more money in the pockets of hard-working people.
Shadow chancellor Ed Balls said that despite the upgrade the poor figures still represented the slowest recovery for 100 years and called on the Government to take action to boost growth.
– Ed Balls, Shadow Chancellor
Despite these welcome changes to its forecasts, the IMF rightly warns that the UK economy will remain below potential for many years. That's why the IMF has repeated its view that the Government should bring forward infrastructure investment now, which could be used to build thousands of affordable homes.
Instead of more complacency from George Osborne, we need action to secure a strong and sustained recovery, catch up all the lost ground and tackle the cost of living crisis.
The Treasury said the upgrade in the UK's growth forecast , which is the biggest for any of the G7 nations - showed the Government's economic strategy was working.
"The IMF has confirmed that the UK economy is turning a corner, by revising up its forecast for growth over the next two years by more than for any other G7 economy," a spokesman said.
"But risks to the global economy remain high, and the recovery cannot be taken for granted.
"That is why the Government will not let up in implementing its economic plan, which has already cut the deficit by a third, kept interest rates near record lows and created over a million-and-a-quarter jobs."
The IMF said that with interest rates remaining low, the Government could afford to do more to boost growth through long-term investment projects while sticking to its plan for tackling the deficit:
In an environment of still low interest rates and under-utilisation of resources, public investment can also be brought forward to offset the drag from planned near-term fiscal tightening, while staying within the medium-term fiscal framework.
The International Monetary Fund (IMF) has upgraded its forecast for Britain's economy, amid "welcome signs" that the pace of economic activity is finally beginning to pick up after the global crash.
But in its latest World Economic Outlook, the IMF said that it would still take years before Britain's economy sees a full recovery.
It suggested the Government should now bring forward public investment projects to offset the squeeze on near-term Whitehall spending.