Admist the turbulence of the financial markets the IMF produced a report generally positive on the state of the UK economy. They revised growth figure of the UK economy to 2.9%, this is in line with the Chancellors last budget forecast.
However the IMF did note a cautionary note.
1. They said inflationary pressures may pick up throughout the year. This will be particularly a problem if wage settlements generate high wage increases. Higher interest rates are a distinct possibility.
2. Although the Chancellor is at last on course to meet the golden rule the IMF warned the government it needed to make "disciplined" choices in the forthcoming spending review. - Government spending has increased sharply making the government's fiscal position less promising.
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