UK should grow 2.9% this year, says IMF

UK should grow 2.9% this year, says IMF

BRITAIN'S economy should continue to show robust growth this year, helped in part by rising house prices, the International Monetary Fund said yesterday.
But it warned the Chancellor, Gordon Brown, that he will need to keep a tight grip on public spending to keep debt under control, and that further interest rate rises may be needed if wage pressures emerge.

According to the IMF's twice yearly World Economic Outlook, the UK economy should grow by 2.9 per cent in 2007 and 2.7 per cent next year. It said these estimates might prove too timid, but that a downturn in British export markets may also create economic headwinds.
As a result of this buoyant climate, the IMF felt further rate hikes might be possible from the Bank of England, after it left rates unchanged at 5.25 per cent last week. It also warned that the government must take care not to allow public finances to deteriorate. "Tight spending control will be needed to halt the rise in public debt," the IMF said.