UK will need a lot of luck to prove the IMF wrong

their debts after they were scorned by the near collapse of the global banking system.

Figures from Nationwide, Halifax and Zoopla have all shown UK house prices falling over the last month.

“The extremely high cost of mortgage borrowing has caused more buyers to withdraw,” Andrew Wishart, senior property economist at Capital Economics, said.

Barnett Economics editor

BRITAIN and the International Monetary Fund (IMF) have a pretty chequered past. Yesterday’s bleak forecasts marked another chapter in the pair’s hate-hate relationship.

Yes, the usual barbs that come from ministers of the incumbent government of the day after the lender of last resort’s forecast don’t help. We saw all that yesterday. But, older people will remember Britain going cap in hand to the IMF after the country effectively ran out of money in the 1970s.

Yesterday’s dire forecast that the UK will be the only G7 country to suffer an economic contraction this year served to sharpen tensions between the Washingtonbased organisation and Britain.

The IMF yesterday said Britain’s economy will shrink 0.6 per cent this year, making it the only G7 nation to veer into reverse.

In fact, even Russia is on course to beat the UK economy.

Government ministers were up in arms.

Tory MP Richard Holden told Times Radio the Washington-based organisation has been wrong before. “I think Britain can beat those predictions,” he said.

In fact, Holden is technically right. The IMF has changed its projections for the UK in each of its last four world economic outlook reports –all downgrades, mind.

But there is a chance the UK could outperform the IMF’s projections.

Fresh numbers out from the lobby group the Institute of Directors (IoD) last night indicated business leaders’ optimism in the UK economy has rebounded sharply.

The organisation said confidence among its membership jumped to 30 points over the last month, although its index is still deep into the negative at minus 28 points.

Inflation seemingly passing its peak in October supported optimism, the IoD said. Tomorrow, the Bank of England is expected to upgrade its economic forecasts markedly from projecting the longest recession in a century back in November to a relatively short and shallow one.

The latest data from the Office for National Statistics also shows the economy may have avoided a recession at the tail end of last year despite most economists warning it had started reversing in winter. November GDP grew 0.1 per cent, a big upside surprise compared to 0.2 per cent contraction anticipated by markets. Output will have to shrink at least 0.4 per cent in December for Britain to meet the technical recession definition of two consecutive quarters of contraction.

It is also worth bearing in mind the IMF regularly revises its economic forecasts. This time last year, it said the UK would grow 2.3 per cent in 2023.

Of course there’s a chance Britain will avoid an economic contraction this year –it’s going to take a lot of luck though.

Delays at Dover and Eurostar trains cancelled as France is hit by strikes

ILARIA GRASSO MACOLA

FERRY operators yesterday warned customers to expect delays on services between Dover and Calais as France is hit by nationwide strikes for the second time in less than two weeks.

Hundreds of thousands of workers – including train drivers, teachers and port workers – have laid down tools against the French government’s decision to raise the age of retirement by two years to 64.

“Due to industrial action taking place today in Calais, passengers may experience delays,” Irish Ferries tweeted yesterday morning, asking travellers to allow for additional time. “If delayed, we will accommodate you on the next available sailing.”

Those who are travelling to France via ferry are not the only ones to be disrupted as several Eurostar services were also cancelled because of the strike action.