The International Monetary Fund on Tuesday slightly upgraded its UK growth forecast for this year but warned over fallout from US tariff threats as it held its estimate for 2026.
Britain’s economy is expected to expand 1.2 percent in 2025, up from 1.1 percent estimated last month, the IMF said in its latest outlook document for the UK, partly citing “very strong” first-quarter growth on better-than-expected business investment.
It warned, however, that global trade tensions would hit UK growth by 0.3 percent for the remainder of this year.
This is due to “persistent uncertainty, slower activity in UK trading partners, and the direct impact of remaining US tariffs on the UK”, the IMF said.
The Fund held its forecast that the UK economy would grow by 1.4 percent in 2026.
Britain’s Labour government welcomed the updated figure, with finance minister Rachel Reeves emphasizing that three recently-struck trade agreements — with the US, EU and India — would help with “protecting jobs, boosting investment and cutting prices”.
The UK and the United States this month reached a post-Brexit deal which reduces tariffs on British cars and removes those on steel and aluminum.
Britain in return will open up markets to US beef and other farm products.
But a 10-percent levy imposed on the UK remains intact as part of Donald Trump’s tariffs blitz on key trading partners.
The IMF added that the three trade deals are “just first steps”.
“We see them as very important at the sectoral level, but not.
Credit: ECONOMICTIMES