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IMF Raises UK Growth Forecast as It Warns on Tax and Spending

  • The IMF raised its UK growth forecast on Tuesday, citing faster economic expansion in early 2025 despite persistent global trade tensions.
  • This revision followed robust activity including consumer spending, business investment, and government policy reforms targeting planning and regulation.
  • The UK economy is expected to grow by 1.2% this year and 1.4% in 2026, although US tariffs and slower trade partner activity may reduce growth by 0.3 percentage points.
  • Chancellor Rachel Reeves highlighted that the UK led G7 growth in Q1 and emphasized pay rises for three million workers, while the IMF recommended gradual monetary easing from the Bank of England.
  • The IMF warned that sustained uncertainty and the impact of tariffs require fiscal discipline, with the Chancellor facing difficult choices to balance tax, spending, and economic stability long term.
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FULCRUM broke the news in on Monday, May 26, 2025.
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