IMF raises UK growth forecast to 1.3% for 2026, warns of 2027 slowdown
IMF lifts UK GDP growth forecast for 2026 to 1.3%, up 0.3 percentage points from its July update.
In Brief
- •IMF lifts UK GDP growth forecast for 2026 to 1.3%, up 0.3 percentage points from its July update.
- •IMF projects growth to edge down to 1.2% in 2027 due to higher energy prices and interest rates.
- •IMF highlights the UK as a G7 country with a deficit‑consolidation plan and advises targeted, temporary energy support.
- •IMF forecasts UK inflation at 3.3% in 2026 and 2.8% in 2027.
- •UK’s first‑quarter 2026 GDP grew 0.6% and the second quarter 0.5%, partly driven by AI‑related businesses.
Why It Matters
The IMF’s upgraded growth outlook signals confidence in the UK’s fiscal consolidation and may influence the Chancellor’s upcoming budget and the Bank of England’s policy stance. A projected slowdown in 2027 could affect public finances and the timing of energy support measures, while the inflation forecast informs expectations for interest‑rate policy. Together, these figures shape investor sentiment, budget planning, and the broader economic narrative for the UK.
Key Details
- 2026 GDP Growth Forecast
- 1.3%
- 2027 GDP Growth Forecast
- 1.2%
- 2026 Inflation Forecast
- 3.3%
- 2027 Inflation Forecast
- 2.8%
- 2026 Q1 GDP Growth
- 0.6%
- 2026 Q2 GDP Growth
- 0.5%
Context & Background
The IMF releases its World Economic Outlook twice yearly; the latest edition was presented in Bangkok, where the UK was singled out for its deficit‑consolidation plan. The forecast reflects the impact of rising energy prices and global economic uncertainty.
Original Reporting & Sources
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