Economy

IMF in upbeat mood, but Britain clouds its global optimism

Cantillon: An uncomfortable visit to Washington for UK chancellor Philip Hammond

Talking Britain up in Washington - UK chancellor Philip Hammond

Sat Oct 14 2017 - 05:45

Leaders of the financial world gathered in Washington this week for the annual World Bank-IMF autumn meetings with something of a spring in their step.

On the eve of the summit the IMF published its World Economic Outlook, upgrading its outlook for the global economy. The fund predicts that global growth will rise to 3.6 per cent this year and 3.7 per cent in 2018, slightly higher than its prediction in July, with the euro zone, Japanese and Chinese economies expected to perform strongly.

There was one notable exception from this upbeat picture however – Britain. The IMF cut its medium-term outlook for Britain, predicting growth to slow to 1.7 per cent this year and 1.5 per cent in 2018, citing uncertainty about Brexit.

The IMF – which immediately downgraded its forecasts for Britain in the wake of the Brexit vote last year – has been criticised by many Leave campaigners for its overly-pessimistic view of the British economy. It made a series of interventions in the months leading up to the British referendum warning of immediate consequences if Britain voted for Brexit. Leave supporters have pointed out with glee that these doomsday scenarios didn’t come to pass.

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Nonetheless, it was an uncomfortable visit to Washington for UK chancellor Philip Hammond. Speaking ahead of the meeting of G20 finance ministers on Friday, Hammond was forced to hit back at claims from within his own party that he has been too pessimistic about Britain's economic prospects.

“What I’m doing here in Washington is talking Britain up, talking about Britain’s future as a champion of free trade in the global economy, seeking further moves on liberalisation on trade in services which will hugely benefit our economy,” he said, adding that Britain had “a very bright future ahead”.

Amid growing alarm that Britain could choose to crash out of the EU without a deal, Hammond will be hoping his words have weight with the global investment and economic community.

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