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IMF upgrades UK growth to 1.3% for 2026, warns of 2027 slowdown

The International Monetary Fund raised its forecast and praised Britain's debt management, but flagged energy prices and interest rates as headwinds ahead.

newest coverage 8h agosummary written 21h ago7 pieces11 likes & upvotes NewswiresMastodonReddit

What to know

  • The IMF upgraded UK 2026 growth to 1.3% from 1%, citing resilience to the US-Iran war's energy shock, but expects slowdown to 1.2% in 2027 as energy prices and interest rates weigh on households.
  • The UK is the only major G7 economy on track to stabilize debt levels and is projected to have the lowest borrowing in the G7 by 2031, according to IMF chief economist Tenreyro.
  • Chancellor Healey's first Budget under PM Burnham will be announced 28 October; government borrowing costs have surged, forcing focus on credibility with financial markets.
  • The gap between IMF's 2027 forecast (1.2%) and the Office for Budget Responsibility's March forecast (1.6%) raises questions about which projection will guide Healey's spending decisions.
some voices

US fiscal policy and Trump's debt accumulation are the root cause of global interest rate pressure affecting the UK.

  • “UK is leading the G7 in debt reduction with Trump's USA last, propped up by the #AIbubble. Even our high interest rates are Trump's fault because he's increasing US debt, that impacts everyone else.”

    markhughes · Mastodon ↗

International Monetary Fund Global economic forecasterSilvana Tenreyro IMF chief economistJohn HealeyJohn Healey Chancellor of the ExchequerAndy BurnhamAndy Burnham Prime MinisterSir Howard Davies Former deputy governor, Bank of England

IMF upgrades UK growth to 1.3% for 2026, warns of 2027 slowdown
bbc.co.uk

How it unfolded 1 development · click the chart to see its coverage articlesposts

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yesterday8 AM4 PMnow · 3:38 AM ET
  1. 1

    Former Bank of England deputy Davies says UK growth forecast "more pessimistic" for 2027

    Sir Howard Davies, former deputy governor of the Bank of England, told the BBC the IMF's 2026 growth forecast was "better than it might have been," but noted the 2027 outlook remained "more pessimistic." He observed the UK is "winning a slow bicycle race" as other economies decline faster, and emphasized that US debt accumulation is putting pressure on global interest rates affecting the UK.

    “We're still growing slowly. It's almost like saying we're winning a slow bicycle race here because other people are going backwards a bit more rapidly than we are.”
    — Sir Howard Davies

    • UK is leading the G7 in debt reduction with Trump's USA last, propped up by the # AIbubble . Even our high interest rates are Trump's fault because he's increasing US debt, that impacts everyone else. 🤦 https://www. bbc.co.uk/news/articles/cmglw0 r21zexo

      markhughes@hachyderm.ioMastodon22h agoview on Mastodon ↗
  2. background

    Chancellor Healey pledges "breathing space" in upcoming budget — Chancellor John Healey acknowledged that Middle East and European wars are affecting the UK and world economies, but said Britain is showing "strong international resilience." He committed to providing households with "breathing space" in the Budget to be announced on 28 October.

  3. background

    IMF chief economist Tenreyro praises UK debt consolidation as leading G7 — IMF chief economist Silvana Tenreyro told BBC News that the UK is now leading major G7 economies in managing its debts. She said the UK should "stay the course" on consolidation, and noted the UK is on track to have the lowest annual borrowing in the G7 by 2031.

  4. background

    IMF raises 2026 UK growth forecast to 1.3%, warns of 2027 slowdown — The International Monetary Fund released its latest economic report upgrading the UK's projected growth for 2026 from 1% to 1.3%, citing global resilience to the energy shock from the US-Iran war. However, the IMF expects growth to decelerate to 1.2% in 2027 due to higher energy prices and long-term interest rates hitting household spending and business investment.

Also covered reported alongside — the timeline has no entry for these yet

  1. 2 outlets UK growth forecast upgraded but higher energy prices to hit economy next year

    first by BBC Business, 22h ago · also BBC

    1 more headline

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