IMF revises UK predictions

The International Monetary Fund (IMF) has revised its prediction for the UK's economy, suggesting that it will out-perform many of the other major countries over the coming 12 months.

It will enjoy growth of 2.9 per cent in 2014, meaning it will be the best-performing of all the biggest economies in the world.

Other nations recording good results in the IMF study include the US on 2.8 per cent, Canada on 2.3 per cent and Germany on 1.7 per cent.

A rebound in consumer spending, low inflation and the ongoing drop in unemployment have all played a role in this renaissance, according to the IMF.

But the Washington-based thinktank, which also acts as a lender of last resort to bankrupt countries, has offered some warnings about the UK's economic future despite this positive report.

For instance, it said, the recovery is still too reliant on easy credit, rather than more stable metrics such as business investment and exports.

A similar sentiment was raised in recent reports from Deloitte and the British Chambers of Commerce, both of which urged the government to back exports and internal investment if it wishes to solidify the current economic recovery.

IMF chief economist Olivier Blanchard suggested that the improvements seen in the British and American financial situations are likely to have a positive effect on the global fiscal situation.

However, concerns still exist. "Adjustment in the south of Europe cannot be taken for granted, especially if euro-wide inflation is low. Financial reform is incomplete, and the financial system remains at risk. Geopolitical risks have arisen, although they have not yet had global macro-economic repercussions," he told the Guardian.

The global situation will have some bearing on financial organisations, with services exports currently at an all-time high.

Export sales jumped by 38 per cent, with orders up by 39 per cent, over the final quarter of 2013.

If the international recovery continues, services could enjoy even greater expansion in the coming 12 months.