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IMF warns about 'damaging cuts'

The head of the International Monetary Fund has urged countries to ease back on cuts because of the impact on growth. It has previously warned the global economic recovery was weakening as government policies have failed to restore confidence.

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Labour: 'IMF forecasts a blow to government credibility'

Coming just hours after George Osborne complacently insisted he would cling on to his failing plan, these downgraded IMF forecasts are another damaging blow to the government's economic credibility.

Twelve months ago the IMF forecast growth of 1.6 per cent in 2012 and said a plan B would be needed if growth were to be lower than expected. A year on, with Britain in a double-dip recession, borrowing rising as a result and growth forecast to be minus 0.4 per cent, there can be no question that a change of course is urgently needed.

– Labour shadow chancellor Ed Balls

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