The IMF’s annual report on the UK forecasts a decline in GDP by 4.2% this year and growth of 0.2% in 2010. BOE policy has been appropriate though it is too early to judge the success of quantitative ease. Rising public debt and financial sector fragility are significant vulnerabilities for the UK, the Fund says. The UK needs a clear plan to cut debt because markets won’t give the UK the benefit of the doubt forever.