IMF Upgrades UK Growth Forecast to 1.6%

The International Monetary Fund (IMF) has slightly upgraded its growth forecast for the UK economy, projecting a 1.6% growth in 2025, which is an improvement from the previous forecast of 1.5%. This positive outlook is attributed to increased public investment from the Labour government's budget and anticipated interest rate cuts by the Bank of England. However, the IMF has downgraded growth forecasts for the eurozone, now predicting 1% growth, with Germany's economy expected to grow by only 0.3%. Concerns over potential inflation spikes in the US due to incoming President Donald Trump's proposed tariffs and tax cuts were also highlighted by IMF officials, who warned that such policies could negatively impact global economic activity. Chancellor Rachel Reeves welcomed the UK's growth forecast, emphasizing the government's commitment to improving living standards through strategic investments. Overall, the IMF's report reflects a cautious optimism for the UK while cautioning about geopolitical tensions and domestic economic policies.