Embarrassment for George Osborne as IMF backs United States to be fastest growing economy

By City & Finance Reporter for the Daily Mail

Published: 16:02 EST, 9 July 2015 | Updated: 16:02 EST, 9 July 2015

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George Osborne suffered an embarrassing setback on Thursday after the International Monetary Fund backed the United States to be the fastest growing major economy in the West.

In the Budget this week, the Chancellor boasted that the UK is ‘growing faster than any other major advanced economy’ after growth of 2.4 per cent was pencilled in by the official independent forecaster.

‘That is faster than America, faster than Germany and twice as fast as France,’ Osborne told the House of Commons on Wednesday.

Oops: George Osborne suffered an embarrassing setback on Thursday after the International Monetary Fund backed the United States to be the fastest growing major economy in the West

‘For the second year in a row, Britain is expected to have the strongest economy growth of any major advanced economy in the world.’

The IMF on Thursday also forecast growth of 2.4 per cent in the UK this year – in line with the Office for Budget Responsibility’s projection and down from the 2.7 per cent previously expected.

But the Fund said it now expects the US economy to grow by 2.5 per cent, making it the fastest growing economy in the Group of Seven industrialised nations.

The IMF also trimmed its global growth forecasts from 3.5 per cent to 3.3 per cent following ‘a setback to activity in the first quarter’.

The Bank of England on Thursday held interest rates in the UK at 0.5 per cent – the record low where they have been since March 2009 during the depths of recession.

David Kern, chief economist at the British Chambers of Commerce, urged the central bank to leave rates unchanged ‘for the foreseeable future’.

He said: ‘Following the Budget, businesses will need a period of stability through which to plan and invest.’