British economy to grow 2.0 percent next year, IMF confirms

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The International Monetary Fund on Tuesday said it expected Britain's economy to grow by 2.0 percent next year, maintaining its previous estimate and support for the government's massive spending cuts.

"GDP is projected to grow at 1.7 percent this year and 2.0 percent in 2011," the IMF said in a report on the British economy. Next year's forecast was unchanged compared with an estimate made in September.

"Risks around this forecast are considerable, though broadly balanced, reflecting continued economic uncertainty both globally and in the UK," it added.

The IMF also repeated its support for deep spending cuts planned by Britain's coalition government aimed at slashing a record high public deficit.

"Directors generally supported the government's frontloaded fiscal consolidation, as it preserves confidence in debt sustainability, restores fiscal space to cope with future shocks, and supports rebalancing.

"They agreed that these benefits outweigh expected costs in terms of a moderate dampening of near-term growth," the report concluded.

Britain's government, led by Prime Minister David Cameron, last month unveiled the country's harshest spending cuts in decades.

Finance minister George Osborne plans to axe half a million public sector jobs as he seeks to almost erase Britain's record deficit totalling almost 155 billion pounds (180 billion euros, 250 billion dollars).

© 2010 AFP

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