Britain's economic performance is impressive and Chancellor of the Exchequer Gordon Brown is on course to meet his fiscal rules in the current cycle, the International Monetary Fund said on Tuesday. With the economy expected to form one of the key planks of a general election likely to be only months away, the IMF's assessment will be welcome news for Brown who is under fire for soaring government borrowing.
In its annual healthcheck of the British economy, the IMF said it expected output to grow between 2.5 and 2.75 percent in the 2005/06 financial year.
"Economic performance in the UK remains impressive," the IMF said. "The success owes much to the strong institutions underpinned by clear and well-designed policy frameworks."
But it warned there were sizeable risks to the generally favourable outlook in both directions.
On the downside, these stemmed from the housing market and the global environment. On the upside, the IMF said, productivity growth could exceed expectations and the unemployment rate consistent with low inflation may have fallen.
"Overall uncertainties remain large," the IMF said.
The IMF said its central forecast was for a "modest decline" in house prices over the coming year but that this would require little in the way of policy response.
Comments
Comments are closed.