The IMF has praised Britain for its aggressive action in tackling the recession, and said that it has set the stage for economic recovery.
Britain has the advantage, which EU countries who have the Euro currency haven't got, of being able to set her own interest rates. The Bank of England recently lowered these to 0.5%, the lowest in history. Countries who have the Euro all must have the same interest rates, controlled by the ECB, so interest rates may decrease even if a country wants them to increase. This is a major disadvantage which Britain, which has the pound, thankfully doesn't suffer (but some economic illiterates still want Britain to adopt the Euro).
Meanwhile, Credit Suisse even predicted that the British economy will grow 1.8% in 2010, which is a higher prediction than that made by the Chancellor of the Exchequer, who predicted a 1.25% growth next year.
The British economy outpaced the economies of the other large EU countries throughout the 1990s and the early 2000s, and could so so again.
IMF: Britain has 'set stage' for economic recovery
The aggressive action taken in the UK to contain the financial crisis has been a success, the International Monetary Fund (IMF) said with the authorities setting the "stage for a sustainable recovery".
20 May 2009
The Telegraph
End of the recession: The IMF predicts British quarterly growth will pick up gradually throughout 2010
In a report on the UK and its economic prospects, the IMF confirmed signs of improving conditions.
But it warned a recovery was being hampered by high levels of household debt, while the report urged the Government to pay back national borrowings faster than planned.
The report follows comments by Chancellor Alistair Darling predicting that the recession will be over by the end of the year.
Chancellor of the Exchequer Alistair Darling: The IMF has praised Britain for its aggressive action in tackling the recession
The IMF stuck by its April forecasts for a 4.1% GDP decline this year and further 0.4% fall in 2010, which contradicts Mr Darling's Budget forecast for growth of 1.2% next year.
But the Chancellor dismissed criticisms that his prediction was too optimistic in an interview in The Times.
He said: "I am not going to change my forecasts. I remain confident that we will see a return to growth at the turn of the year."
The IMF predicts quarterly growth will pick up gradually throughout 2010, although it cautioned that the speed and strength of the recovery was "highly uncertain".
And the economy faces "significant vulnerabilities" given the size of public debt and ongoing fragility of the financial sector, according to the IMF.
While it said the tripartite authorities - the Bank of England, Treasury and Financial Services Authority - had helped avoid a systematic breakdown in the banking sector, the IMF called for banks to put even more capital aside in case of further shocks.
It added lending was still unlikely to return to levels sufficient to help a recovery.
The Bank of England also recently said lending would take longer than expected to return to normal.
But there have been encouraging economic indicators and a growing case for a recovery next year.
Credit Suisse experts recently forecast even higher growth in 2010 than the Treasury, pencilling in 1.8%.
In last month's Budget, Mr Darling estimated the economy would shrink by 3.5% this year but would expand by 1.25% in 2010.
He rebuffed suggestions that his forecasts were too rose-tinted.
"I delivered my Budget statement four weeks ago... None of the figures I have seen since would change the projections that I have made," he told The Times.
The Chancellor also said recovery would depend on banks boosting the flow of credit to companies and consumers and on other European governments shoring up their financial institutions.
He swept aside fears that the economy was sliding towards deflation after official figures yesterday showed the Retail Prices Index fell at the fastest rate since records began in 1948.
He said the drop in inflation "is in line with expectations. Deflation is quite different".
Mr Darling also expressed a wish to stay in his post amid rumours he may be moved in an impending Cabinet reshuffle. "The job is not done. This is very much work in progress," he said.
telegraph.co.uk
Britain has the advantage, which EU countries who have the Euro currency haven't got, of being able to set her own interest rates. The Bank of England recently lowered these to 0.5%, the lowest in history. Countries who have the Euro all must have the same interest rates, controlled by the ECB, so interest rates may decrease even if a country wants them to increase. This is a major disadvantage which Britain, which has the pound, thankfully doesn't suffer (but some economic illiterates still want Britain to adopt the Euro).
Meanwhile, Credit Suisse even predicted that the British economy will grow 1.8% in 2010, which is a higher prediction than that made by the Chancellor of the Exchequer, who predicted a 1.25% growth next year.
The British economy outpaced the economies of the other large EU countries throughout the 1990s and the early 2000s, and could so so again.
IMF: Britain has 'set stage' for economic recovery
The aggressive action taken in the UK to contain the financial crisis has been a success, the International Monetary Fund (IMF) said with the authorities setting the "stage for a sustainable recovery".
20 May 2009
The Telegraph
End of the recession: The IMF predicts British quarterly growth will pick up gradually throughout 2010
In a report on the UK and its economic prospects, the IMF confirmed signs of improving conditions.
But it warned a recovery was being hampered by high levels of household debt, while the report urged the Government to pay back national borrowings faster than planned.
The report follows comments by Chancellor Alistair Darling predicting that the recession will be over by the end of the year.
Chancellor of the Exchequer Alistair Darling: The IMF has praised Britain for its aggressive action in tackling the recession
The IMF stuck by its April forecasts for a 4.1% GDP decline this year and further 0.4% fall in 2010, which contradicts Mr Darling's Budget forecast for growth of 1.2% next year.
But the Chancellor dismissed criticisms that his prediction was too optimistic in an interview in The Times.
He said: "I am not going to change my forecasts. I remain confident that we will see a return to growth at the turn of the year."
The IMF predicts quarterly growth will pick up gradually throughout 2010, although it cautioned that the speed and strength of the recovery was "highly uncertain".
And the economy faces "significant vulnerabilities" given the size of public debt and ongoing fragility of the financial sector, according to the IMF.
While it said the tripartite authorities - the Bank of England, Treasury and Financial Services Authority - had helped avoid a systematic breakdown in the banking sector, the IMF called for banks to put even more capital aside in case of further shocks.
It added lending was still unlikely to return to levels sufficient to help a recovery.
The Bank of England also recently said lending would take longer than expected to return to normal.
But there have been encouraging economic indicators and a growing case for a recovery next year.
Credit Suisse experts recently forecast even higher growth in 2010 than the Treasury, pencilling in 1.8%.
In last month's Budget, Mr Darling estimated the economy would shrink by 3.5% this year but would expand by 1.25% in 2010.
He rebuffed suggestions that his forecasts were too rose-tinted.
"I delivered my Budget statement four weeks ago... None of the figures I have seen since would change the projections that I have made," he told The Times.
The Chancellor also said recovery would depend on banks boosting the flow of credit to companies and consumers and on other European governments shoring up their financial institutions.
He swept aside fears that the economy was sliding towards deflation after official figures yesterday showed the Retail Prices Index fell at the fastest rate since records began in 1948.
He said the drop in inflation "is in line with expectations. Deflation is quite different".
Mr Darling also expressed a wish to stay in his post amid rumours he may be moved in an impending Cabinet reshuffle. "The job is not done. This is very much work in progress," he said.
telegraph.co.uk
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