"Key advanced economies should pursue a policy mix that supports near-term growth, anchored by credible plans for medium-term public debt sustainability"
- The International Monetary Fund
The International Monetary Fund has revised up its growth forecast for the U.K., even in the face of sharp cuts to the rest of the world. The IMF now expect British gross domestic product to rise by 0.9% this year, up from 0.7% estimated in April. The outlook for 2014 remained unchanged at 1.5% expansion. The forecast for the U.K. now stands head and shoulders above its major peers from the rest of Europe, with Germany expanding at 0.3% pace this year, and 1.3% over the next one. The Eurozone as a whole is seen contracting 0.6% in 2013, compared with April's projection of a 0.3% decline. The IMF also said the U.K. economy is likely to expand 0.6% in the second quarter of this year, even despite weak manufacturing figures for May published earlier this week. In addition to that, experts stressed out that it is too early to draw a line under the worst of the financial crisis, and mentioned that the economic recovery is still facing major risks.
In a separate report on Wednesday Moody's Investors Service raised its outlook on Britain's banking sector, citing improving profitability and lower impairments, as lenders across the country are trying to clean up their balance sheets and increase capital ratios. Moody's increased the outlook to stable from negative, however, it maintains a negative outlook on the long-term debt and deposit rating of the country's largest banks.
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