New outlook says economy will grow at 1.1% rather than 0.7% previously forecast with falling inflation and interest rates helping global growth
The UK economy will grow faster than previously thought this year, according to an upgraded outlook by the International Monetary Fund in a boost to the chancellor, Rachel Reeves, ahead of her first budget next week.
In a significant revision of the Washington-based organisation’s biannual economic review, UK growth in 2024 is expected to be 1.1%, up from a projection of 0.7% in July. The IMF’s forecast for 1.5% growth next year was unchanged.
Reeves, who is due to join finance ministers and central bank governors on Thursday at the IMF’s annual meeting in the US capital, has made economic growth the centrepiece of Labour’s plans over the next five years.
She is expected to unveil a big increase in infrastructure investment when she delivers the budget on 30 October in a break with the much-reduced capital spending plans put in place by the previous Conservative administration.
The IMF said in its latest World Economic Outlook report that nations such as the UK that depend on services had grown strongly this year, leaving behind those including Germany that were more reliant on selling manufactured goods.
The UK is expected to be the joint third fastest-growing economy in the G7 this year, in line with France and behind the US which is on course to grow by 2.
