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Osborne under renewed fire from IMF over weak growth

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Chancellor George Osborne has come under renewed fire from the International Monetary Fund for the lack of growth in the UK economy.

Last week, the IMF published a report calling for a slower deficit reduction programme in a bid to boost the economy. IMF chief economist Olivier Blanchard urged the UK to rethink its economic policy but had been dismissed by the Government as “just one voice”.

The  FT reported sources close to Osborne insisting he would “aggressively” defend his policies and would not change course.

Since then Osborne has come under further criticism with both IMF head Christine Lagarde and deputy head David Lipton attacking the UK growth rate.

The Telegraph reports Lipton said: “The UK economy has turned out to be somewhat weaker than had been foreseen, so our view is that the pace of consolidation ought to be reconsidered, and we’ll want to come and have some discussions about that.”

Next month Lipton will conduct a more detailed analysis of the UK economy and will make further recommendations for improvements.

Last week Lagarde said that the UK growth rate was “not particularly good” and the IMF stands by its calls for the UK to slow spending cuts.

The Guardian reports she said: “We have said that should growth abate, should growth be particularly low, then there should be consideration to adjusting by way of slowing the pace. This is nothing new. And this is still the position and one that has been very clearly articulated within the various departments.”

Last week Fitch Ratings followed Moody’s in downgrading the UK credit rating from AAA to AA+, blaming rising debt, slow deficit reduction and concern over the eurozone.

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