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UK’s economy is growing faster than IMF forecasts

The International Monetary Fund (IMF) predicted that British economic growth would be less than one per cent last year, but the recovery has been significantly stronger than that.

Christine Lagarde, the IMF head, has stated:

 

“We got it wrong. We acknowledged it. Clearly the confidence building that has resulted from the economic policies adopted by the government has surprised many of us. We said very clearly that we had underestimated growth for the UK and that our forecasts had been proven wrong by the reality of economic developments.”

 

About one year ago, an economist at the IMF, Oliver Blanchard, argued that suboptimal economic policy could reduce economic growth in 2013 to less than one per cent. This kind of performance would have dampened consumer spending significantly.

In 2013, the British economy grew by nearly two per cent. This year, it is set to expand by significantly more than two per cent. According to Ms Lagarde, the national economic recovery is quite stable because it is not based purely on increasing household consumption. Investment from the private sector is beginning to change the nature of the recovery.

If the analysis of Ms Lagarde is correct, it is excellent news for many British households. Those wishing to improve their properties can feel somewhat reassured about the future economic prospects of the country. More people will take advantage of opportunities such as those connected with wood flooring in Cheshire . With property prices on the rise, a gradual increase in interest rates should not cause a serious problem.

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