LONDON: Britain on Tuesday welcomed news that the International Monetary Fund (IMF) has upgraded its growth forecast for the nation’s economy.

British economic growth was expected to hit 2.4 per cent this year, the IMF revealed in its latest World Economic Outlook.

That represented a sharp upgrade from the previous growth prediction of 1.9pc that was given in October.

The IMF now expects Britain to be among the fastest growing of the world’s advanced economies during 2014, handing a major boost to British finance minister George Osborne’s deficit-slashing austerity policies.

“Today’s report provides further evidence that the government’s long term economic plan is working, with the IMF upgrading their 2014 forecast for the UK by more than any other G7 economy,” said a Treasury spokesman.

“But the job is not yet done and so the government will go on taking the difficult decisions necessary to deliver a sustainable recovery for all.”

Despite government austerity, Britain cemented its economic growth recovery in the second half of last year, in large part thanks to a housing market revival thanks to cheap home loans and government stimulus schemes.

Rates on loans handed out by retail banks have managed to stay relatively low thanks to them being able to borrow cheaply from central banks. But at the same time, banks are offering low returns on savings, hitting pensioners in particular.

Britain’s gross domestic product (GDP) grew by 0.8pc in the third quarter of 2013 — the fastest pace for three years — and the country’s unemployment is falling faster than expected, according to the latest official data.—AFP