The government has welcomed the latest IMF (International Monetary Fund) forecast for the UK economy, which anticipates GDP (gross domestic product) will rise more quickly than anticipated.
The new estimates of 0.7% in 2024 and 1.5% in 2025 will situate the UK in the middle of the leading G7 economies, an improvement from less optimistic forecasts in October 2023.
This broadly tallies with growth predictions from Goldman Sachs, who earlier this month upped its 2025 forecast for the UK economy to 1.6%, and Deutsche Bank, whose economists are now expecting a gross domestic product figure of 1.2% this year.
Worldwide, the IMF is forecasting global average growth of 3.3% in 2025, although this is conditioned by political instability, shifting debt dynamics and the prospect of further protectionist trade tariffs.
There is also wariness amongst some policymakers about inflationary pressures within the services sector. The IMF published its World Economic Outlook UK findings in May before the election, and their data does not reflect the change in government.
While Chancellor of the Exchequer Rachel Reeves was pleased with the news, she added a cautionary note, and stressed that the government is still committed to addressing foundational economic weaknesses.
Among the government’s priorities is the regional productivity gap within the UK, which has been described as a drag on growth. The National Institute of Economic and Social Research (NIESR) has called for more decentralisation, skills devolution and improved high speed rail in the North linking Liverpool, Manchester and Hull, something that could benefit any investment planning in Cheshire, Shropshire and other surrounding regions.
