Europe News

UK needs to export and invest: Osborne

We need to build a more resilient economy: UK Fin Min

The UK needs to invest and reverse its declining exports if its recovery is to be more sustainable, the country's Treasury chief, George Osborne, told CNBC.

Speaking at the International Monetary Fund's spring meeting in Washington, Osborne admitted that the while the U.K.'s economy was showing signs of growth, it needed to go beyond a consumer credit-led recovery.

"We need more investment. We certainly need more exports," he said. "I think this whole Western model which is 'let's borrow money from the Chinese to buy the things they make for us', is not sustainable."

Read More

Last week the IMF increased its forecast for the U.K.'s annual gross domestic product (GDP) growth rate to 2.9 percent this year—the second upward revision this year. It came just weeks after Osborne upgraded his own outlook. He forecast GDP would accelerate by 2.7 percent this year, after growth of 1.7 percent in 2013.

At a news conference last week IMF Chief Economist Olivier Blanchard said the organization had "clearly under-forecast"U.K. growth previously.

However there are concerns about the nature of the recovery and that the U.K.'s comeback isn't built on a firm foundation.The U.K.'s fiscal watchdog, the Office for Budget Responsibility, has raised concerns about the country's balance of trade.

Read More IMF 'proved wrong' by UK recovery, says George Osborne

2013 Getty Images

Osborne told CNBC that while "you can't change a country's trade patterns overnight" the U.K. government was looking to strengthen trade ties beyond its main market, the rest of Europe.

"We're connected into North America markets. But whether it's with China, India, Brazil, Indonesia, Mexico, we need to better connect with those markets," he said.

"We also need to attract investment not just from those countries but from many other countries."

Osborne also used the IMF spring meeting to unveil plans to crack down on tax evasion but make it easier to prosecute people with undeclared foreign income—by removing the need to prove that someone had intended to evade paying their taxes.

"I expect for that to bring money in but it will also be a deterrent effect and our efforts on tax avoidance off-shore have brought in billions of pounds in the past couple of years," he said.

Follow us on Twitter: @CNBCWorld