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IMF Warns of Weak UK Recovery

The International Monetary Fund (IMF) has sent out a warning this week that the UK is still a long way from strong, sustainable growth that the government is desperately seeking. However, it went on to say that current austerity plans were acting to drag down the economy – more needs to be done to offset this negative impact by investing in infrastructure.

The IMF commented: “Notwithstanding the recent uptick in activity, per capita income remains 6 percent below its pre-crisis peak, making this the weakest recovery in recent history. Of particular concern is that capital investment (as a share of GDP) is at a postwar low, and that youth unemployment is high.”

Richard Driver of Caxton FX agreed that more needed to be done to promote growth in the UK: “The IMF are absolutely right; more definitely needs to be done to stimulate UK growth. The economy has been crying out for infrastructure spending for some time now. Growth promoting measures needn’t replace Osborne’s commitment to austerity but can be run alongside. Admittedly, Osborne may need to slow austerity in the near-term, but this doesn’t preclude him from delivering success in his objectives in the long-term.

“This isn’t the most scolding of IMF reports and Osborne won’t be panicked into action, particularly in light of improved UK economic figures over the past couple of months. However, the report does ramp up the pressure and puts the government back under the microscope; I suspect a change of path will come but we will inevitably have to be patient.”

So, while things might be moving in the right direction, there’s still lots to do. If your business is struggling to keep afloat, it’s worth looking into alternative finance options if the banks aren’t willing to lend. With invoice finance, you can get a cash flow boost which can really help growth and investment in your business.

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