The International Monetary Fund on Tuesday said the U.K. economy would escape a recession this year, the latest upgrade from policymakers on the fortunes of the British economy.
The IMF now is forecasting 0.4% growth, a marked change from its previous estimate of a 0.3% decline, and an even more bullish assessment than the Bank of England, which also withdrew its recession forecast this month.
The IMF said strong wage growth, improved confidence and falling energy prices led to the upgrade, and is now forecasting the U.K. economy to outperform Germany, which is expected to shrink by 0.1%.
The IMF also said new measures including a boost to childcare support and the introduction of a capital investment allowance will boost the economy in the medium term.
The iShares MSCI UK ETF
EWU,
has gained 8% this year — just a shade under the 9% return for the S&P 500
SPX,
The British pound
GBPUSD,
is up 20% from its late September lows.
