"The Washington-based fund said it was important to continue reducing the budget deficit given market pressures and elevated implementation risks. In its annual health check on the UK economy, the IMF praised the chancellor, Rachel Reeves, for striking a good balance between deficit reduction and growth-friendly spending as it upgraded its growth forecasts for 2026."
"After sounding the alarm last month that Britain would suffer the heaviest economic blow from the Iran war, it increased its forecasts for growth of 0.8% to 1% to reflect the UK's strong prewar momentum and a robust performance in the first quarter of the year. Reeves said the upgrade showed the government had the right economic plan after official figures released last week showed the economy grew at a stronger rate than first anticipated at the start of the year."
"In a thinly veiled rebuke to Labour MPs considering toppling Starmer, she said: Putting our stability at risk when signs of progress are emerging would leave families and businesses worse off. The IMF intervention comes amid a sharp rise in government borrowing costs worldwide amid the mounting economic fallout from the Iran war."
"Investors also fret that a Labour leadership challenge could topple Starmer and lead to a successor increasing borrowing levels. Investors have highlighted comments by Andy Burnham, the favourite to replace Starmer should he win a byelection to return to parliament, that Britain was too in hock to the bond markets. The Greater Manchester mayor has since softened his stance, suggesting at the weekend he was committed to the government's current fiscal rules and reducing the UK's debt levels."
The International Monetary Fund urged Britain to keep cutting government borrowing amid rising bond market concerns tied to a potential Labour leadership challenge. The IMF said reducing the budget deficit remains important given market pressures and implementation risks. It praised Chancellor Rachel Reeves for balancing deficit reduction with spending that supports growth, while upgrading growth forecasts for 2026. Growth forecasts were raised to 0.8% to 1% after earlier warnings about the Iran war’s economic impact. The upgrade reflected strong prewar momentum and a robust first-quarter performance. Reeves said the forecast improvement confirmed the government’s economic plan, warning that risking stability would harm families and businesses. Investors also worried that a leadership change could increase borrowing levels.
Read at www.theguardian.com
Unable to calculate read time
Collection
[
|
...
]