UK growth upgraded but energy prices and rates to bite in 2027
The IMF has upgraded its 2026 growth forecast for the UK economy to 1.3%, though it warns of a slowdown in 2027 due to rising energy prices and interest rates. The report highlights the UK's progress in debt consolidation compared to other G7 nations.
Why it matters
Economic forecasts from the IMF influence government fiscal policy and market confidence, particularly as the UK prepares for upcoming budget announcements.
Share Save Add as preferred on Google Faisal Islam , Economics editor, Bangkok and Michael Race , Business reporter, London Getty Images The UK economy is forecast to grow by more than previously expected this year before higher energy prices and interest rates hit the economy in 2027, the International Monetary Fund (IMF) said.
The organisation's latest report, which is closely watched by the government, said the UK economy would expand by 1.3% in 2026, up from the 1% it predicted in July, before slowing in 2027.
Economies across the world have proved more resilient to the energy price shock caused by the US-Iran war, the IMF said, but it warned the economic fallout from the conflict remained "highly uncertain".
Chancellor John Healey said the government would look to "provide some breathing space" for households in the Budget.
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