IMF Upgrades UK Economic Growth Forecast for 2024

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The International Monetary Fund (IMF) has revised its growth forecast for the UK economy, projecting a more optimistic outlook for 2024. According to the IMF’s latest **World Economic Outlook** report, the UK’s gross domestic product (GDP) is now expected to grow by 1.1% in 2024, up from its earlier estimate of 0.7%. This adjustment reflects the positive effects of declining inflation and reduced interest rates, which are expected to drive consumer spending and stimulate economic activity. 

In addition to its 2024 forecast, the IMF maintained its projection for 2025, predicting that the UK economy will grow by 1.5%. This steady outlook suggests that the UK’s economic recovery remains on track, though the IMF cautioned that several factors could introduce uncertainty, especially upcoming elections. The report warned that newly elected governments might introduce significant changes in fiscal and trade policies, potentially impacting future growth in key regions.

Global Economic Outlook Holds Steady Amid Market Volatility

While the IMF upgraded its outlook for the UK, it held its global economic growth forecast for 2024 steady at 3.2%. This suggests that the global economy is expected to grow at a moderate pace, despite ongoing challenges. The IMF highlighted a high level of uncertainty in the global outlook, noting that financial markets have experienced volatility in recent months. Specifically, Japan’s markets saw one of their worst trading days in decades in August before a subsequent recovery, raising concerns over the appropriate monetary policy stance in certain countries.

In terms of inflation, the IMF revised its forecast for the UK slightly upwards. Inflation is now expected to be 2.6% in 2024, up from its previous estimate of 2.5%. For 2025, inflation is projected at 2.1%, slightly higher than the earlier forecast of 2%. The IMF also adjusted its unemployment outlook, predicting that the UK’s unemployment rate in 2024 will be 4.3%, marginally higher than the previous forecast of 4.2%.

In conclusion, the IMF’s revised outlook suggests that the UK economy is on a stronger footing than previously anticipated. However, political uncertainty and global market fluctuations remain key risks that could impact future growth.