G20 growth fears but Britain hits targets

Britain remains one of the few countries among the world’s 20 biggest industrial nations, known as the G20, that is meeting its growth targets, the International Monetary Fund said yesterday.

The IMF assessment, issued after a meeting of G20 finance ministers and central bank governors in Cairns, Australia, followed its earlier warning that Britain might have to move swiftly to tighten monetary policy and raise interest rates if costs run ahead of productivity growth or slack in the economy is absorbed.

Christine Lagarde, IMF managing director, said that despite continuing global recovery the pace of growth remained uneven, partly because of risks of turmoil in financial markets and geopolitical tensions.

Markets have surged recently despite concerns over the impact of US and European economic sanctions on Russia and the threat posed by Islamists in Iraq.

Ms Lagarde appealed for member states of the G20 to promote “economic policies that can contribute to a more robust and job-rich recovery.”

The IMF expects the US to show the strongest rebound in 2014-15 after the surprising downturn in the first quarter, which now appears to have been entirely due to freezing winter conditions shutting down the east coast states. But growth in the euro-zone is forecast to strengthen “more gradually and unevenly as the crisis legacy brakes ease only slowly,” Ms Lagarde said.

The meeting in Australia also endorsed plans aimed at exchanging tax information across borders in a further crackdown on global tax evasion.

The G20 wants the IMF to co-operate in a programme that will mean member states will automatically exchange the information on a reciprocal basis by the end of 2018.

“We share the sense of importance of rapid progress and implementation and urge our member countries to complete the reform,” said Ms Lagarde.

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