GRIM FUTURE17 Jan 2025 17:08
The International Monetary Fund has upgraded its forecast for UK growth this year in an update to 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%.