IMF downgrades UK economic growth forecasts
The IMF has today downgraded UK economic growth forecasts for 2010 and 2011 to 1.2% and 2.1% respectively from earlier forecasts of 1.3% and 2.5%. The figure for 2011 is in line with the UK government's forecast issued after the emergency budget although the 2.1% forecast for 2011 is below the UK government's forecast of 2.3%. So what does this mean for the UK economy?
Despite the fact that George Osborne is currently under pressure regarding the disintegration of the Office for Budget Responsibility it would appear that the IMF and the UK government are in tandem with regards to economic growth forecasts for 2010. Whether the UK government is a little optimistic with regards to 2011 remains to be seen because at this moment in time there is an awful lot of guesswork and so many variables are involved.
The main fact is that the UK economy is still growing and is still forecast to grow in the short to medium term. It will be interesting to see how future budget changes impact upon economic growth and indeed whether the UK government will be forced to delay any more significant tax rises and budget cuts until a later date.
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