IMF backs Coalition spending cuts

The IMF has broadly backed the Coalition Government's spending cuts and efforts to tackle the deficit.

It says "the UK economy is on the mend", with the stabilisation of unemployment and recovery of the financial sector highlighted as significant improvements. Although households and businesses will have to continue to keep a close eye on their purse strings, the IMF envisages real GDP growth of 2% in 2011, rising gradually to 2.5% in the medium term. The organisation is also predicting CPI inflation will fall back to the 2% target by early 2012, putting the continuing high figure down to the impact of the January 2010 and 2011 VAT increases and rebounding global commodity prices. T...