IMF upgrades UK growth forecast and backs Healey's fiscal plan

Summarised from 2 outlets · Updated 13 Oct, 10:44 · Archive

The International Monetary Fund has upgraded its forecast for UK economic growth to 1.3% in 2026, up from a previous forecast of 1%, and praised the government's plan to repair public finances. The IMF's economic counsellor, Silvana Tenreyro, said the UK 'stands out' among G7 countries in having a plan to narrow its deficit. Speaking at the IMF's annual meetings in Bangkok, she said the message for the UK was simply to 'stay the course'.

Growth is expected to slow to 1.2% in 2027 as higher energy prices take their toll, the IMF said. The Fund also revised its unemployment forecast downwards to 5.3% for this year, lower than its previous prediction of 5.6%. However, the IMF revised inflation forecasts upwards: it now expects UK inflation to average 3.3% this year, up from 3.2%, making it the joint second-highest rate among the G7. Inflation is predicted to slow to 2.8% next year, significantly higher than the 2.4% previously forecast.

With Healey's first budget due shortly, the IMF warned governments against unfunded giveaways to help households with rising living costs. The Fund stressed that any support for households facing higher energy bills should be 'temporary, targeted and non-distortionary'. Chancellor Healey, responding to the forecast, said Britain's economy was showing 'strong international resilience in the face of these challenges', citing conflict in the Middle East and Europe.

How it is being reported

• IMF's boost to John Healey ahead of Budget but price warning for householdsThe International Monetary Fund upgrades UK's economic forecast for 2026 but warns governments against unfunded measures to soften the impact of higher living costsThe Mirror · 13 Oct, 10:16
• Healey should ‘stay the course’ and repair UK finances, says top IMF economistFund upgrades UK’s GDP growth forecast for 2026 to 1.3%, but says it is likely to ‘edge down’ next year IMF warns global economy ‘could soon test the limits of resilience’ John Healey should “stay the course” and continue repairing the UK’s public finances, the International Monetary Fund’s top economist has said, after the fund lifted its growth forecast for Britain. Little more than a fortnight before Healey’s first budget, Silvana Tenreyro, the IMF’s economic counsellor, said the UK “stands out” among G7 countries in having a plan to narrow its deficit. Continue reading...The Guardian · 13 Oct, 07:49

In this story: John Healey · Silvana Tenreyro · International Monetary Fund · UK · G7

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