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Osborne cheered by IMF report

The Chancellor of the Exchequer has welcomed a report by the International Monetary Fund which states the UK economy is on the right track to recovery.

George Osborne made his comments despite caveats in the IMF’s annual report which warned there were still ‘significant risks’, not least weak growth in the economy, continued concerns over unemployment and rising inflation.

He said: “I welcome the IMF's continued strong support for our overall macroeconomic policy mix, including our deficit reduction strategy.

“The IMF have publicly asked themselves the question 'whether it is time to adjust macroeconomic policies' - in other words, is it time to change course? And they have concluded definitively that 'the answer is no'.”

But shadow chancellor Ed Balls said Mr Osborne should not take too much comfort from the IMF report.

“It says it all about George Osborne that he hails an IMF forecast that implies rising unemployment and predicts slower growth. His complacency about the state of the economy is concerning,” Balls said.

He added: “By cutting too far and too fast, I believe he is creating a vicious circle,” Mr Balls told the GMB trade union's annual conference.

“That vicious circle is more people out of work, on benefits, making it harder to get the deficit down.”

Balls insisted that Labour, which wants to halve the deficit over four years, offered a ‘more balanced alternative approach to the deficit which would put jobs first’.

The IMF even said that should growth falter, the ‘Plan B’ for the UK economy would not be slowing the pace of spending cuts, but rather temporary tax cuts, more quantitative easing and bigger cuts to welfare spending – suggesting that, if anything, it thinks the Osborne plan may not go far enough.

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