IMF chief praises British government's handling of economy

Christine Lagarde says coalition's 'smart fiscal policy' is delivering results, despite IMF itself warning about budget deficit and household debt

The head of the International Monetary Fund, Christine Lagarde, has praised the British government's management of the economy, saying it is "clearly delivering results".

Her comments came a day after the Washington-based organisation took a gloomier view of the UK's growth prospects over the next five years. It said Britain's next government would struggle to reduce the budget deficit - the difference between tax income and government spending - and that rising household debt was threatening the recovery.