UK GDP Revised Up Amid Strong H1 2025 Growth, IMF Projects Elevated Inflation
The International Monetary Fund has revised its UK growth forecast upward following stronger-than-expected economic performance in the first half of 2025. Britain now ranks as the second-fastest-growing G7 economy, trailing only the US, with a projected 1.3% expansion this year.
However, the IMF warns the UK faces the highest inflation among G7 nations through 2026, driven by surging energy costs. Prices are expected to rise 3.4% in 2025 before moderating to 2.5% in 2026, with a return to the 2% target anticipated before 2027.
The growth revision comes despite global trade tensions exacerbated by new US tariffs. Chancellor Rachel Reeves and Bank of England Governor Andrew Bailey will address these challenges at this week's IMF annual meetings in Washington.
