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UK growth upgraded but energy prices and rates to bite in 2027
BBC • • general
Key Points:
- The IMF has raised its forecast for UK economic growth in 2026 to 1.3%, up from 1% predicted in July, but expects growth to slow to 1.2% in 2027 due to higher energy prices and interest rates.
- The UK is one of the few major economies on track to stabilize national debt levels, with plans to reduce annual borrowing by nearly four percentage points of GDP from 2025 to 2031, the largest reduction among G7 countries.
- IMF Chief Economist Silvana Tenreyro praised the UK’s debt management, stating it leads the G7 alongside India, and advised the UK to continue its consolidation efforts.
- Inflation is expected to average 3.3% this year and remain above the Bank of England’s 2% target at 2.8% in 2027, continuing to pressure household finances.
- Economic and political responses include calls for targeted support for those struggling with living costs, warnings against tax rises that could slow growth, and debates over regional growth strategies within the UK government.
