IMF: UK will stay in red until 2020, despite election vows

The International Monetary Fund forecast Thursday 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 percent of GDP in 2015 to less than one percent 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 0.3 percent 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.

The Tories promised a surplus from the fiscal year 2018-2019 -- which would be Britain's first for 18 years -- if they win the general election.

Labour's manifesto, presented on Monday, did not specify a date for hitting a surplus should they win, but promised to cut the deficit every year and "to have a surplus on the current budget as soon as possible in the next parliament".

Both parties are locked in the latest polls at around 34 percent, and the country is no closer to establishing the identity of the next prime minister.

Either party may have to find a partner in order to form a government, with the Greens and the Scottish National Party (SNP) making natural partners for Labour, while the populist right-wing UKIP could enter a deal with the Tories.

The Liberal Democrats, who have ruled alongside the Tories for the last five years in a coalition, said on Wednesday they would be open to partner either party.

The negotiations with smaller parties to form a government will involve compromise across the board, and could possibly weaken commitments to austerity.