The IMF has urged John Healey to keep repairing the public finances after lifting its UK growth forecast, while warning inflation, energy costs and higher rates could still weigh on the economy.
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01Summary
- 01IMF economic counsellor Silvana Tenreyro said the UK should “stay the course” on reducing its deficit and public debt.
- 02The IMF raised its UK growth forecast for this year to 1.3%, up 0.3 percentage points from July.
- 03It now expects UK growth to slow to 1.2% next year and said it could “edge down” in 2027 as higher energy prices and interest rates hit demand.
- 04The IMF said UK average inflation is forecast at 3.3% this year and 2.8% in 2027, with core inflation not returning to 2% until late next year.
- 05Healey is due to deliver his first budget on 28 October and faces pressure over energy bill support and wider spending pressures.
02Why it matters
The IMF’s comments add pressure on Healey to balance support for households with efforts to keep the public finances on track. Its forecasts also suggest that higher energy costs and interest rates may keep squeezing living standards and borrowing costs.
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