The International Monetary Fund (IMF) has cautioned that the Chancellor must adhere to her spending and tax policies, even if the UK economy is predicted to grow somewhat faster than anticipated in 2025.
In its yearly economic health check, the IMF forecasted 1.2% growth this year and 1.4% growth in 2026. Following an uptick in the year’s first three months, it declared that an economic recovery was “underway.”
A little more than a month has passed since the powerful group lowered its 2025 projection for the UK from 1.6% to 1.1%. Growth was “robust” in the first three months of the year, according to Luc Eyraud, head of the IMF’s UK mission.
Official data released this month show that increases in corporate investment and consumer spending helped the economy. However, the data was from before the US implemented import tariffs and the UK raised employer taxes in April. The IMF commended the government’s proposals for infrastructure investment and planning changes, stating that they would boost growth “if properly implemented.”
However, it also stated that Chancellor Rachel Reeves will have to make “difficult choices” to balance taxes and expenditures in the long run due to a “high level of global uncertainty, volatile financial market conditions, and the challenge of containing day-to-day spending.
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