The International Monetary Fund (IMF) has forecast that Britain's economic growth will surpass all major European economies next year, rebounding sharply from the 2023 recession. The UK's GDP is expected to grow by 0.7% this year, an upgrade from the previous 0.5% forecast.
In 2025, growth is projected to more than double to 1.5%, outpacing Germany, France, and Italy's 1.3% and 0.9%.
However, the UK will lag behind the US, projected at 1.8%, and Canada, leading with a 2.4% growth rate. Nevertheless, the UK will outpace Japan, which is anticipated to see a 1% growth in 2025.
The IMF also warned of potential risks, including persistent inflation that may necessitate slower interest rate cuts or further increases to manage price pressures. Additionally, the IMF highlighted concerns about excessive Government borrowing in the US and other countries, which could pose future economic risks.
The Chancellor, Rachel Reeves, said:
"While it's welcome that the IMF is forecasting growth to pick up this time, I am under no illusion to the scale of the challenge facing the economy and the inheritance this new Government faces. That is why we are already taking the tough decisions to fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off."
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