Brown predicts "stronger" economic growth

18-09-2006

Chancellor Gordon Brown suggested today that UK economic growth this year is set to be "stronger and more balanced", providing an upbeat assessment of the economy after the International Monetary Fund (IMF) raised its own forecast for British growth.

In its twice-yearly World Economic Outlook published last week, the IMF said that it expected the British economy to expand by 2.7 per cent in 2006, up from an April forecast of 2.5 per cent and ahead of the Treasury's own growth predictions.

Speaking to reporters before flying back from Singapore, where he attended the IMF's annual meeting over the weekend, Mr Brown said that analysts would have to draw their own conclusions about the state of the UK economy in light of the IMF's upward forecast.

Asked whether he would be upgrading his own prediction for economic growth, which he set at between 2.0 and 2.5 per cent in his budget forecast six months ago, Mr Brown told journalists: "You'll just have to look at what the March forecast was and draw your own conclusions."

"I'm saying economic growth is stronger and more balanced. I don't give another forecast until the pre-budget report. Tempting as it is to give it you guys today, I'm not going to do that, but you can draw your own conclusions about the improvement in the economy," he added.

Commentators claim that the IMF's positive assessment of UK economic growth is likely to provide a boost to Mr Brown ahead of next week's annual Labour conference in Manchester, when the chancellor is expected to pitch his claim to succeed Tony Blair as the party's next leader and prime minister.

Predictions of a rise in economic growth come after Mr Brown was forced to admit at IMF meetings last year that the UK economy would probably expand at half the rate he predicted in his March 2005 budget.

The UK economy grew at its fastest rate in two years during the second quarter, boosted by an increase in consumer spending.

However, economists warn that increased confidence about UK growth could result in further interest rate rises, with inflation currently still running at 2.5 per cent, significantly above the Bank of England's two per cent target.


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