UK economy: IMF reiterates 3.2% growth projection for 2014 and 2.7% next year as Britain outpaces rivals

UK economy set to grow faster than US, Germany and France

The UK remains on course to outpace the world's major advanced economies this year, the International Monetary Fund said on Tuesday.

Growth is projected to average 3.2 per cent this year and 2.7 per cent in 2015, which is about quarter of a percentage point stronger than forecast by the IMF in April but unchanged on its last estimate in July.

The 2014 projection, disclosed in the IMF's World Economic Outlook, is better than the organisation's other forecasts that the United States will grow by 2.2 per cent this year, Germany by 1.4 per cent and France by 0.4 per cent.

Rising geopolitical tensions, the moderation of growth in emerging markets and a slowing eurozone economy mean the IMF's overall global output forecast is 3.3 per cent this year, which is 0.4 of a percentage point lower than April's forecast. The figure for 2015 is also slightly lower at 3.8 per cent.

"Despite setbacks, an uneven global recovery continue," the IMF said. "In advanced economies, the legacies of the pre-crisis boom and the subsequent crisis, including high private and public debt, still cast a shadow on the recovery."

Since the IMF's forecast last year that the UK would grow by just 1.5 per cent in 2014, the recovery has been driven by consumer spending and a tentative rebound in the production sector.

However, he added: "It's particularly important that the IMF today not only highlight the risks to our recovery from the rest of the world but also warn that our hard won fiscal credibility should not be put at risk, showing exactly why we must keep working through the long term plan."