IMF Lifts UK 2026 Growth to 1.3%, Urges Healey to Stay Course on Deficit
Updated
Updated · The Guardian · Oct 13
IMF Lifts UK 2026 Growth to 1.3%, Urges Healey to Stay Course on Deficit
3 articles · Updated · The Guardian · Oct 13
Summary
The IMF raised its 2026 UK growth forecast to 1.3% from 1.0% and said Britain stands out in the G7 for already pursuing deficit reduction ahead of John Healey’s 28 October budget.
Silvana Tenreyro urged the chancellor to keep repairing public finances even as he faces pressure to unveil broad energy-bill relief, with the IMF instead backing only temporary, targeted support.
UK growth was stronger than expected in the first half—0.6% in Q1 and 0.5% in Q2—helped in part by expansion in AI-related businesses, but the IMF cut its 2027 forecast to 1.2%.
Higher oil prices and rising long-term rates are expected to weigh on consumption and investment, while markets increasingly expect the Bank of England to raise rates in November.
Inflation is still seen staying above target—3.3% this year and 2.8% in 2027—leaving Healey to balance household support, fiscal credibility and £35 billion in longer-term spending pressures.