Britain's economy to grow faster than expected but IMF warns tougher times lie ahead
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TL;DR
- IMF upgrades UK growth forecast for 2026 to 1.3% from 1%.
- UK economy grew 0.6% in Q1 and 0.5% in Q2.
- Growth forecast for 2027 is 1.2%, with higher energy costs and interest rates cited as risks.
- Inflation expected to average 3.3% this year, easing to 2.8% in 2027, still above Bank of England's 2% target.
- Chancellor John Healey faces pressure to find around £35 billion to fund public services and defence commitments.
- IMF notes UK's 'consolidation process' in borrowing control stands out among G7 economies.
- Concerns raised about the long-term outlook due to high taxes and energy costs.