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UK economy set for weakest growth of G7 next year after downgrade – IMF

10 Oct 2023 2 minute read
Chancellor Jeremy Hunt . Photo Aaron Chown PA Images

The UK is forecast to record the weakest economic growth across the G7 group of advanced economies next year, according to the International Monetary Fund (IMF).

It came as bosses at the finance body said the global economy is “limping along” amid pressure from persistent inflation and higher borrowing costs in its latest economic outlook.

The IMF, in a new assessment of the UK economy, marginally upgraded its growth prediction for UK gross domestic product (GDP) this year to 0.5%, from 0.4%.

It would be second weakest performance across the G7, behind Germany, according to the United Nations’ financial agency.

The IMF however downgraded its forecasts for the UK’s economic growth next year.

It had previously pointed towards 1% growth for 2024 but on Tuesday reduced this prediction to 0.6% amid pressure from higher interest rates.

This would represent the worst growth rate across all of the G7, while Canada is expected to have the strongest growth, at 1.6%.

GDP

Global GDP is expected to rise by 3% this year and 2.9% next year, according to the latest forecast.

The prediction for 2023 was held the same against the organisation’s previous prediction in July, while its forecast for 2024 saw a 0.1 percentage point decline.

IMF director of research, Pierre-Olivier Gourinchas, said: “The global economy continues to recover from the pandemic, Russia’s invasion of Ukraine and the cost-of-living crisis. In retrospect, the resilience has been remarkable.

“Despite war-disrupted 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.”

The IMF also predicted that the UK would see consumer price index (CPI) inflation 7.7% for the current year, with this set to slow more sharply to 3.7% next year.


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Sarah Good
Sarah Good
7 months ago

Another downgrade? Another bottom of the class rating?
And yet the Tories are still in government?

Steve Duggan
Steve Duggan
7 months ago

The world constantly focuses on growth but ultimately is it sustainable and the right way forward for humanity? I notice some countries are now focusing on a better quality of life for their citizens that is not just based on whether the country grows economically or not. Not easy to do but, whether we like it or not, that will probably be the future.

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