IMF upgrades UK growth forecast and takes swipe at Trump plans
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UK economy predicted to grow by 1.6% this year as fund warns of potentially destabilising effect of Trump policy. Business live – latest updates. The International Monetary Fund has upgraded its forecast for UK growth this year in its biannual assessment of the global economy, while taking a swipe at plans by Donald Trump’s incoming US administration for the potentially destabilising effect of large-scale tax cuts, import tariffs and weaker regulations.
In a fillip to the Labour government, the Washington-based organisation said it expected the UK economy to grow by 1.6% in 2025, up from an earlier forecast of 1.5%. The IMF judged that Labour’s increase in investment spending, improved household finances and a series of interest rate cuts by the Bank of England would give the UK economy a lift, after growing by 0.9% in 2024 according to the fund’s expectations.
The UK upgrade was in contrast to the eurozone, where the IMF revised down its forecasts for growth in 2025 in Germany, France and Italy. Analysts at the IMF said they believed the Bank of England would cut interest rates four times this year, reducing the headline rate from 4.75% to 3.75%.
Until last week, financial markets were betting on only two rate cuts, though a fall in inflation to 2.5% and figures showing weak retail sales before Christmas have increased the odds of at least three reductions this year. A spokesperson for the IMF said Labour’s budget rules showed the government was committed to bringing down the UK debt over the longer term.
