IMF Raises U.K. Growth Forecast for 2017, Reversing Previous CutBy
Washington-based group expects 1.5% expansion this year
Pro-Brexit groups have criticized IMF for scaremongering
The International Monetary Fund raised its forecast for the U.K. economy this year, reversing a cut just over three months ago because of the pace of growth in the second half of 2016.
In an update to its World Economic Outlook published Monday, the Washington-based group upgraded its projection to 1.5 percent from 1.1 percent. That would compare with estimated growth of 2 percent in 2016.
The fund, which cut the U.K. forecast in early October, said the latest move was “mostly on account of a stronger-than-expected performance during the latter part of 2016,” It also said it was lowering its 2018 projection by 0.3 percentage point to 1.4 percent.
Pro-Brexit campaigners have accused the IMF and other institutions of scaremongering before the June referendum that saw Britain vote to leave the European Union. Prime Minister Theresa May is due to deliver a speech outlining her vision for separating from the bloc tomorrow. Speculation that she will favor abandoning the single market sent the pound lower on Monday.
The IMF kept its forecasts for global growth this year and next unchanged, at 3.4 percent and 3.6 percent. For the euro area, 1.6 percent expansion is seen in 2016 and 2017, reflecting a slight upgrade for this year.