Healey should ‘stay the course’ and repair UK finances, says top IMF economist
Summary
The International Monetary Fund (IMF) has raised its forecast for UK economic growth in 2024 and advises the UK government to continue its efforts to reduce public debt. The IMF also recommends that any government support for rising energy costs should be temporary and targeted to avoid bigger economic problems.Key Facts
- The IMF raised the UK’s growth forecast for 2024 to 1.3%, up 0.3% from earlier estimates.
- Growth is strong partly due to the rise of AI-related businesses in the UK.
- The IMF expects growth to slow slightly to 1.2% in 2027 because of higher energy prices and rising interest rates.
- The UK is recognized by the IMF for having a clear plan to reduce its budget deficit among G7 countries.
- The IMF warns against broad government subsidies and advises support should be temporary and focused.
- UK inflation is predicted to be 3.3% in 2024 and 2.8% in 2027, above the Bank of England’s 2% target.
- The Bank of England and other central banks are expected to raise interest rates to manage inflation.
- Chancellor John Healey is under pressure to include energy bill support in his upcoming budget.
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