Government austerity measures and high levels of consumer debt pose “strong headwinds” for the UK’s economic recovery, the IMF has warned.
According to the IMF’s latest report, growth will be “restrained” to 1.7% in 2011 and 2.3% next year as inflation picks up, according to reports.
The warning comes after Bank of England governor Mervyn King said CPI inflation is likely to rise above 5% this year, with higher than forecast energy prices hitting consumers and pushing up forward projections.
According to analysis by Capital Economics, the Bank believes GDP will grow by “just below 2% this year and around 2.5% in 2012”.
