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IMF to drop criticism of UK economic strategy

The International Monetary Fund will drop its criticism of the coalition’s economic strategy in its annual report to be delivered today, the FT reports.

According to the paper, the IMF will deliver a more positive assessment of the UK’s economic policy than in previous years in its “Article IV” statement.

The FT says the IMF will not change its forecasts for the UK economy, retaining the April estimates of 2.9 per cent growth in 2014 followed by 2.5 per cent next year.

But the fund will back down on its call for the Government to slow the pace of budget deficit reduction and instead focus on policies which sustain the economic recovery.

The IMF is set to discuss when it is sensible for the Bank of England to begin raising interest rates and highlight the improving housing market as a potential threat to sustained growth.

The report is likely to call for further action to cool the housing market, including looser planning controls and higher land taxation.

In April 2013, IMF chief economist Olivier Blanchard said Britain’s deficit reduction strategy was “playing with fire”. He has since said he is “pleasantly surprised” by Britain’s economic recovery.

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  1. Julian Stevens 6th June 2014 at 9:25 am

    One of the soundest eco-political decisions UK plc ever made was not to throw away the £ in favour of the € which, for most of the countries who did so, has been a disaster. Hundreds of billions of € were just handed out willy nilly to various countries with virtually no conditions as to how they should use that money and no collateral against them just frittering it away, which is what most of them did. Now they’re in the mire and the only Eurozone economy that’s doing well is that of Germany.

    The next step should be to withdraw totally from EU membership, as proposed by UKIP, and get on with running our own affairs without interference from Brussels.

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