The UK is projected to achieve stronger economic growth next year than most of its G7 peers, trailing only the US and Canada, according to the International Monetary Fund (IMF).
The influential economic body’s latest report anticipates Britain’s GDP growth will surpass Japan, Italy, and France, while equalling Germany’s.
The IMF maintained its UK economic growth forecasts for 2026 and 2027 at 1.3 per cent and 1.5 per cent respectively. Global growth is projected at 3.3 per cent in 2026 and 3.2 per cent 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.”
This article was written by Independent Reporters from The Independent and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.