the International Monetary Fund said Britain's economic recovery will be even stronger than thought during 2014.
The International Monetary Fund said Britain's economic recovery will be even stronger than thought during 2014.Reuters

UK Chancellor George Osborne has told the world's business and banking elite to put the recession behind them and step up their investments into the economy as the prolonged recovery will be led by them.

Speaking at the World Economic Forum in Davos, Switzerland, Osborne told 30 senior executives that the government has already done its best to create an environment favourable to business and now it was time for companies to stop being cautious and start investing back into their sectors.

He added that the economic outlook is a lot brighter than a year ago so now it's time for businesses to start expanding, creating jobs and capitalising on favourable UK conditions.

On 21 January, the International Monetary Fund said Britain's economic recovery will be even stronger than previously forecast during 2014.

The IMF said the UK economy would grow by 2.4% across the year, up from its previous estimate of 1.9% and the biggest increase of any country in the world. Growth will then slow slightly to 2.2% in 2015.

The following day, the UK reported a surge in job creation over the past three months that has brought the unemployment level to just 0.1% off the Bank of England's 7% threshold for considering a rise in interest rates.

According to the Office for National Statistics, the UK's unemployment rate dipped by 0.3% to 7.1% in November.

The unemployment level fell by 167,000 to 2.32 million in the three months to November, which was the largest quarterly decline since the autumn of 1997, and the second largest since records began in 1971.

Tough Message

Osborne's optimistic message was met with mixed reaction from some of the biggest names in business.

"Actually, people who run businesses tend to want to avoid controversy rather than stimulate [debate], so it's probably quite a difficult message for some people," said Sir Martin Sorrell, the head of media group WPP.

Meanwhile, industry groups cautioned Osborne over thinking that the economic recovery will be fuelled by business investment.

"I accept the investment cycle is only now on the turn. People were wrong when they said this would be an investment-led recovery," said John Cridland, director general of the CBI.

"Investment will be a lagging indicator but part of the mix for this year. We want higher capital expenditure. There are big piles of cash that can be released to fund productivity improvements in business to go alongside employment growth."

Elsewhere, a major Chinese investor has said it is ploughing money into the UK as it still remains more 'open' than any other European country - but continues to lag behind the US.

"The US is more [open] than the EU but in terms of countries the UK is the most open," said Wang Jianlin, chairman of the Dalian Wanda Group, the hotels and tourism conglomerate.