UK growth for next year only behind US and Canada of G7 counterparts

The UK’s growth projection for next year puts it behind only the US and Canada out of its G7 counterparts, according to the International Monetary Fund (IMF).

In its latest outlook report, the influential economic body said the UK’s GDP growth was expected to be higher than Japan, Italy and France – and equal with Germany.

The UK economic growth projections for 2026 and 2027 are unchanged from the last report, at 1.3% this year and 1.5% next year.

Global growth meanwhile is projected at 3.3% in 2026 and 3.2% in 2027.

After previously saying UK inflation was set to surge, the IMF reported it was expected to return to target by the end of 2026 due to a weakening labour market.

It said the global economy has remained “remarkably resilient”, and there were signs that technology-related investment contributed to the UK growth, but not at the same scale as in the US.

While the IMF kept its economic forecast for this year and next unchanged, it nudged up its prediction for 2025 to 1.4% from 1.3% previously.

Chancellor Rachel Reeves said: “After years of decline, this is the year the country turns a corner.

“The IMF has upgraded our growth for the third time in a row since April 2025, putting us on course to be the fastest growing European G7 economy this year and next.”

She added: “Thanks to the stability we have brought to the economy and the investment we’ve unlocked, we continue to defy the forecasts and ease the cost of living for families by bringing down bills.”

Shadow Chancellor Sir Mel Stride said: “A 0.1% uptick is not a triumph and the fact Rachel Reeves is celebrating it shows how desperate she has become.

“The economy is flatlining.”