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UK economy upgraded by the IMF as rapid growth predicted


28 July 2021

It's a remarkable feat of recession-defying odyssey that the financial markets seem to display right now. Britain, which is in the midst of what is being touted as the worst recession in 300 years, has just had its economic status upgraded by the International Monetary Fund (IMF). According to the IMF, the United Kingdom is set for the joint fastest growth among the G7 nations this year as the country bounces back from the devastation wreaked on it by the government's draconian lockdowns.

As a result of this prediction, the IMF has provided Britain with a huge upgrade, and considers that saying economic output should increase by 7% this year.

This is being portrayed by mainstream media as a very positive movement, however the economy is still languishing in the wilderness compared to its impeccable state in 2019. Last year, when the lockdown was first implemented, UK gross domestic product was reported to have contracted by 19.8% in Quarter 2 (Apr to June) 2020, revised from the initial estimate of a 20.4% fall, and the lack of productivity has not yet ended.

The prediction by the IMF which has resulted in the upgraded status of the UK economy which took place today outstrips its initial estimate of 5.3% growth, however it is in line with forecasts which were made a month ago by the OECD's Paris headquarters that UK GDP will rise by 7.2% in 2021, the fastest growth since 1941, after a 9.8% contraction in 2020, confirming that the current recession is the worst in 300 years.

That would outpace other advanced economies, including the US. Back in March, the OECD had forecast UK growth of 5.1% this year. For 2022, growth has been revised significantly higher, too – to 5.5%, from 4.7% three months ago. The GBPUSD is back up to a healthy 1.39 after a two week period at 1.37, which although can hardly be called a massive move, but in today's relatively stagnant currency markets, that is quite a considerable move.

Therefore, any news appears relating to a potential upward move within the depressed G7 economies is worthy of note. Whether the prediction meets the reality is yet to be seen of course.

Risk warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.5% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets or CFDs work and whether you can afford to take the high risk of losing your money.
Monecor (London) Ltd is a member firm of the London Stock Exchange. Authorised and regulated by the UK Financial Conduct Authority (FCA) with Financial Services register number 124721 and the South African Financial Sector Conduct Authority (FSCA) under license number 50246.
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