No 10 insists UK economy is strong despite IMF warning it will fare worse than any other in developed world – including Russia | Politics News
Downing Street insists that the UK economy is strong despite the International Monetary Fund’s warning that the UK economy will decline this year and be worse than all other developed countries.
In its latest World Economic Outlook update, the IMF again cut its UK gross domestic product (GDP) forecast to a contraction of 0.6% from a 0.3% rise recorded in October last year.
The outlook for the coming year puts the UK far behind its counterparts in the G7 group of developed countries.
Dire IMF outlook for UK economy ‘wrong’ – latest politics
The UK is also expected to be the only developed and emerging economy to be hit by the coronavirus. year of falling GDP.
But a spokesman for the prime minister told reporters that the IMF itself “said that UK economic policy is now on the right track.”
The spokesman added that the UK outperformed many forecasts last year and “is forecast to grow faster than Germany and Japan in the coming years.”
But Shadow Chancellor Rachel Reeves said the government needed to do “much more” to unlock the potential of the UK economy.
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Asking an urgent question about the IMF economic outlook update in the House of Commons, Ms Reeves said: “The UK has great potential, but 13 years of conservative failures have put a brake on prosperity.
“Today’s IMF assessment reflects missed opportunities, and this is not a very pleasant sight.
“The UK is the only major economy that is projected to contract this year. Weaker growth compared to our peers over the next two years.
“The world has improved, Britain has gone down. The growth is even worse than the sanctions hitting Russia.”
Taking aim at Chancellor Jeremy Hunt, who was not there, she added: “If the chancellor had ideas, answers or courage, he would be here today. But he is not.”
Ms Reeves continued: “Now people are asking the question: Is my family and I better off after 13 years of Conservative rule? The answer is no. And, as the IMF is showing today, this should not be the case. “
Earlier Monday, Transportation Secretary Richard Holden challenged the IMF’s forecast.
Asked if the IMF was wrong, Holden told Sky News: “I think so.”
He added that the IMF had been wrong in its forecasts “in the last couple of years” and that he thought “the UK could beat its forecasts, as it has done in the last two years”.
The Conservative minister told Kay Burley that the UK economy has “growing faster than Germany since 2016” and “growing faster than France, Italy and Japan since 2010”.
Mr. Holden also said the body’s report “praises” the actions Chancellor Jeremy Hunt and Prime Minister Rishi Sunak have taken to try to stabilize the country’s finances.
Former cabinet minister Jacob Rees-Mogg agreed with Mr. Holden, telling Sky News that his earlier remarks about the IMF were “completely brilliant.”
“Well, first of all, it’s a forecast,” Rees-Mogg said.
“And when was the last time the IMF forecast was correct? So you have to understand that predictions are not historical fact.”
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Responding to the IMF’s latest economic forecast earlier Tuesday, the chancellor said “these figures confirm that we are not immune to the pressures that affect almost all advanced economies.”
“Short-term challenges should not overshadow our long-term outlook – the UK beat many forecasts last year and if we stick to our plan to halve inflation, the UK is projected to grow faster than Germany and Japan in the coming years. “, the statement says.