smallbusiness.co.uk: Helping your business think big

The International Monetary Fund has cut growth predictions for the UK despite upgrading the pace of global recovery.

The organisation revised growth estimates to 1.2 per cent for this year and 2.1 per cent in 2011, down from the 1.3 per cent and 2.5 per cent it predicted in April.

Meanwhile world output is now expected to rise 4.6 per cent this year, 0.4 per cent more than the IMF predicted three months ago.

Sam Turvey, spokesperson for the British Chambers of Commerce, says: ‘These figures are similar to our own forecasts, which we have downgraded to 1.3 per cent this year and 2 per cent for next year. The revision reflects a tough year ahead, as interest rates are likely to rise and unemployment will increase as the austerity measures are felt.’

The IMF's latest report puts UK growth next year below the 2.3 per cent predicted by the Office for Budget Responsibility for 2011.

Official GDP figures for the second quarter will be released later this month.

There are currently no comments on this article