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Highlights:
- The IMF raises UK 2024 growth forecast to 1.1%, placing the UK third among G7 nations.
- UK growth will surpass Japan, Italy, and Germany, with global growth expected at 3.2%.
- IMF praises global economic resilience during the disinflationary process, avoiding recession.
The International Monetary Fund (IMF) has raised its growth forecast for the UK economy, now predicting a 1.1% increase in 2024, up from the 0.7% forecast in July. This revision positions the UK as the third fastest-growing economy among the G7 nations, trailing behind the US and Canada, and matching France in growth expectations.
The IMF's updated forecast places the UK ahead of Japan, Italy, and Germany, where growth is expected to stagnate. Globally, the IMF predicts a 3.2% rise in economic activity for 2024. Looking ahead to 2025, the UK’s economy is projected to grow by 1.5%, with that forecast remaining unchanged from earlier predictions.
IMF chief economist Pierre-Olivier Gourinchas pointed out that Europe’s economic growth is on an improving trajectory. He highlighted the resilience of economies worldwide, which have weathered the disinflationary process without slipping into recession. Gourinchas credited monetary policy as a key factor in keeping inflation expectations stable and supporting economic stability.
Chancellor Rachel Reeves welcomed the improved forecast, emphasizing the importance of continuing efforts to strengthen the UK’s economic foundations. She hinted that next week’s Budget would focus on addressing underlying economic challenges, with the goal of ensuring long-term growth and stability.
The IMF’s upgraded forecast reflects a more positive outlook for the UK economy, highlighting its ability to maintain growth despite global challenges and ongoing economic adjustments.
