The IMF has expressed concerns about trade tensions stemming from Donald Trump's tariffs, indicating that these will dampen the UK's economic growth into 2026. However, the IMF has upgraded its growth forecast for the UK in 2025 from 1.1% to 1.2%, citing strong economic recovery. While the UK is anticipated to grow by 1.4% in 2026, trade tensions are expected to reduce this by 0.3 percentage points this year. The government’s proposed reforms could spur growth if executed correctly, as mentioned by Chancellor Rachel Reeves, highlighting the UK's position as the G7’s fastest-growing economy at the moment.
The authorities' structural reforms, including to planning, and the increase in infrastructure investment could increase potential growth if properly implemented.
The UK was the fastest growing economy in the G7 for the first three months of this year and today the IMF has upgraded our growth forecast.
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