IMF Upgrade For UK As Russian Growth Shrinks
The International Monetary Fund (IMF) has revised upwards, for a fourth consecutive time, its forecast for UK economic growth while sharply lowering expectations for the US and sanctions-hit Russia.
In its latest World Economic Outlook (WEO), the IMF upgraded its estimate for UK growth by 0.4% to 3.2% this year.
It represented the biggest upwards revision among major economies and confirmed its earlier projection that the UK would grow this year by more than any other advanced economy.
The IMF's expectations for 2015 also rose - with GDP growth of 2.7% now forecast.
The Chancellor George Osborne, who was accused by the IMF 15 months ago of "playing with fire" over his austerity programme, responded: "Today the IMF has upgraded their 2014 forecast for the UK by more than any other major economy.
"The Government's long term economic plan is working but the job is not yet done and so we will go on making the assessment of what needs to be done to secure a brighter economic future".
The update was released just a day before official figures are due to give the first estimate of second quarter GDP growth - expected by economists to remain in line with that measured in the previous quarter, of 0.8%.
The UK's economic recovery has been helped by wider employment compared to previous recoveries, the housing market recovery, improved manufacturing output but also particularly strong consumer spending despite weak wage growth.
The IMF charted the effects of a harsh winter on the recovery in the US, citing first quarter weakness across the Atlantic as a component behind its decision to downgrade its global growth projection by 0.3% to 3.4%.
It said the move also reflected slowing growth in many emerging markets and softer domestic demand in China.
But it was its latest forecast for the effects of the crisis over Ukraine on Russia that caught the eye.
Its expectations for Russian GDP growth in 2014 were slashed by 1.1% to a paltry 0.2%, with the effects of western sanctions biting into activity.
The IMF said downside risks to global growth included the possibility of higher oil prices arising from global conflicts - with Russia a major supplier of gas and oil to mainland Europe.