IMF Upgrades UK Growth Forecast as Global Economy Faces Diverging Trends
The UK is projected to lead European growth in 2025, while the IMF warns of risks from U.S. policy shifts under President-elect Trump.
- The IMF has raised the UK's GDP growth forecast for 2025 to 1.6%, citing increased public investment, improved household finances, and anticipated interest rate cuts by the Bank of England.
- The UK is expected to outpace major European economies like Germany, France, and Italy over the next two years, with Germany's growth forecast significantly downgraded to just 0.3% in 2025.
- Global growth is projected to remain steady at 3.3% in 2025 and 2026, though still below the pre-pandemic average of 3.7%, as inflation continues to decline globally.
- The U.S. economy is forecast to grow by 2.7% in 2025, driven by a strong labor market and robust private demand, but the IMF warns that proposed tax cuts, tariffs, and deregulation could risk inflation and financial instability.
- China's growth is expected to slow to 4.6% in 2025, with risks tied to a property market slump and potential trade tensions under the incoming U.S. administration.
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