Overview

• The IMF lifted its UK growth projection for 2025 to 1.2%, up from 1.1% in April, after stronger-than-expected first-quarter GDP.
• It retains a 1.4% expansion forecast for 2026 while cautioning that trade tensions and US tariffs will shave 0.3 percentage points off output by then.
• The Fund advises the Bank of England to continue gradual monetary easing, anticipating interest rate cuts toward a 3% terminal level.
• It highlights the UK government’s planning and infrastructure reforms as key drivers of potential productivity gains if fully implemented.
• The IMF warns that rising healthcare and pension costs could push public spending above half of GDP by 2050 and recommends refining fiscal rules to avoid emergency spending cuts.