IMF GIVES DEFICIT WARNING TO UK

The International Monetary Fund forecast yesterday that Britain’s public deficit would remain in the red until at least 2020, contradicting promises made by the Conservative and Labour parties ahead of the May 7 general election.

The IMF’s biannual report on state budgets, published ahead of its major spring meeting in Washington, predicted that Britain’s deficit would continue to decline, falling from 4.8 per cent of GDP in 2015 to less than one pc in 2018.

But it added that British finances would remain in the red until at least 2020, although the deficit could be as low as 0.3pc by then.

The report concluded that “uncertainties pertaining to the May elections” would lead to a “slightly slower pace of consolidation” for the 2016-2017 fiscal year than was assumed in the government’s March budget.

Britain’s two main political parties — Prime Minister David Cameron’s centre-right Conservatives, and the centre-left Labour Party led by Ed Miliband — both launched election manifestos this week in which they vowed to wipe out the budget deficit by the end of the next parliament, in 2020.