Darling stands by growth forecasts

by Richard Kilner

Story link: Darling stands by growth forecasts

Although the IMF again reduced its economic growth forecast for the UK last week, Chancellor Alistair Darling has indicated his own confidence in the British economy.

The IMF has forecast growth of just 1.6% in both 2008 and 2009, contrasting with the Chancellor’s more upbeat predictions of 1.75-2.25% in 2008 and 2.25-2.75% next year.

Less than a year ago the IMF was predicting growth in 2008 of 2.3%, a stark indication of how quickly the economic situation has changed due to the subprime mortgage crisis, credit crunch and Northern Rock.

However, the Chancellor has stated that he stands by his growth forecasts and has said he believes the UK economy to be fundamentally sound.

Recently Darling has called upon British banks to pass along the Bank of England’s interest rate cut to consumers, in a bid to help bolster the mortgage market.

March saw the latest signal of economic concern, with the Halifax recording a drop in house prices of 2.5%, the largest monthly fall for 16 years.