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Investing.com -- The International Monetary Fund (IMF) has slightly increased this year’s growth forecast for the United Kingdom (TADAWUL:4280), according to its regular evaluation of the country’s economy.
The IMF has also advised U.K. Finance Minister Rachel Reeves to stay committed to her plans to reduce public borrowing.
The IMF now predicts that the U.K.’s growth will reach 1.2% this year, a slight increase from the 1.1% it had projected in April.
Despite challenges from U.S. tariffs, which are expected to reduce annual output by 0.3%, the growth is expected to rise to 1.4% in 2026.
Luc Eyraud, the IMF’s mission chief to the U.K., said the revised forecasts are a result of the robust GDP performance in the first quarter.
He further highlighted the resilience of the UK economy amidst a complex external environment.
The IMF also anticipates that the Bank of England (BoE) will reduce interest rates by a quarter of a percentage point every quarter until they reach around 3%.
This is a significant decrease from the current rate of 4.25%, as stated by Eyraud.