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Global economists were branded \u201cpessimistic\u201d about the UK after downgrading growth forecasts for next year. The International Monetary Fund said it expects Britain to record the weakest expansion across the G7 group of advanced economies in 2024.<\/p>\n
But Tories have pointed out the forecaster has only been correct twice since 2016 and has had to change its predictions, admitting the UK\u2019s fortunes were on the up.<\/p>\n
Sir John Redwood said: \u201cThe IMF is regularly too pessimistic about the UK. It has often had to revise its forecasts. Let\u2019s hope the Chancellor proves them wrong again.\u201d<\/p>\n
The UK has almost always outperformed IMF predictions and its latest analysis does not \u00adfactor in recent changes in official figures.<\/p>\n
These say that say the country recorded the G7\u2019s third fastest recovery from the pandemic in the year after the outbreak. Its assessment is also based on market expectations in August for rising interest rates, which have since eased.<\/p>\n
Britain has grown faster than France and Germany since 2020 and has secured the quickest expansion of any major European economy over the last 13 years.<\/p>\n
Chancellor Jeremy Hunt said bringing down inflation remains the priority. He added: \u201cThe IMF have upgraded growth for this year and downgraded it for next. But longer term they say our growth will be higher than France, Germany or Italy. To get there we need to deal with inflation and do more to unlock growth, which I will be focusing on in the upcoming Autumn Statement.\u201d<\/p>\n
The IMF said UK interest rates are set to remain high for \u201ca little while longer\u201d due to concerns over persistent inflation. It also warned the global economy is \u201climping along\u201d with persistent inflation and higher borrowing costs. The finance body marginally upgraded its growth forecast for UK gross domestic product this year to 0.5 percent from 0.4 percent.<\/p>\n
It would be the second weakest performance in the G7, behind Germany. The IMF previously pointed towards 1 percent growth in 2024 but reduced the prediction to 0.6 percent due to interest rates.<\/p>\n
It is the lowest growth forecast across the G7, while Canada is set to perform best at 1.6 percent. In its report, the finance body said: \u201cThe decline in (UK) growth reflects tighter monetary policies to curb still-high inflation and lingering impacts of the terms-of-trade shock from high energy prices.\u201d<\/p>\n
The Bank of England\u2019s base interest rate is currently 5.25 percent. Inflation is forecast to be 7.7 percent for the year with a sharp fall to 3.7 percent next year, according to the IMF.<\/p>\n
READ MORE <\/strong> Interest rate rises could push US and Europe into \u2018potential\u2019 recession<\/strong><\/p>\n Director of research Pierre-Olivier Gourinchas said: \u201cThe general perspective on the UK is relatively subdued growth, falling momentum and a labour market which is cooling, but inflation remains quite persistent. That is going to require monetary policy to remain tight for a little while longer into next year.\u201d<\/p>\n Global GDP is expected to rise by 3 percent this year and 2.9 percent next year, said the latest forecast.<\/p>\n Mr Gourinchas said: \u201cThe global economy continues to recover from the pandemic, Russia\u2019s \u00adinvasion of Ukraine and the cost-of-living crisis.<\/p>\n \u201cIn retrospect, the resilience has been remarkable. Despite war-\u00addisrupted energy and food markets and unprecedented monetary tightening to combat decades-high inflation, economic activity has slowed but not stalled. Even so, growth remains slow and uneven, with widening divergences. The global economy is limping along, not sprinting.\u201d<\/p>\n Meanwhile, the Chancellor met key construction firms and investors at No10 yesterday. He set out plans for re-\u00adinvesting \u00a336billion from the cancelled leg of HS2 into better transport links for more towns and cities.<\/p>\n As many as 10,000 homes will be built where the line finishes at Euston station in London with private investment.<\/p>\n We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info<\/p>\n![](\"https:\/\/cdn.images.express.co.uk\/img\/dynamic\/139\/590x\/secondary\/5005266.jpg?r=1696973657977\")
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