By Daniel Hunter

The International Monetary Fund (IMF) has lifted its economic growth forecast for the UK this year from 0.7% to 0.9%, adding to the belief that the economy is firmly back on the right track.

Not since April 2012 has the IMF raised its UK forecast. A Treasury spokesman said it showed that the economy was moving from 'rescue to recovery'.

In April this year, the Fund cut its forecast to 0.7% from 1%, sparking wide debate about whether Chancellor George Osborne should alter his policies.

“The news that the UK economy is slowly on the road “from rescue to recovery” continues the feel-good factor felt across the country following the past weeks’ events, but perhaps the state of the economy is a little more significant than rugby, tennis and fine weather," Vince McLoughlin, Partner at Russell New, commented.

“Surveys this week also signalled the housing market is roaring back to life, business optimism is strengthening and consumers are feeling confident enough to spend more at the shops. However, are we right to celebrate an uplift in the forecast of such a modest 0.2%?

"After recent times perhaps we are, yet patience is still required by our businesses, growth of 0.9% next year is still too weak to improve employment figures or create a revival in manufacturing investment.

"Businesses up and down the country will still need to adopt innovative and resourceful measures in their approach to customers and suppliers in order to ride the crest of the economic wave. There is little doubt that UK SMEs are the lifeblood of our economy and the Government’s strapline of “Britain is very much now open for business” is now looking more realistic.”

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