The International Monetary Fund has increased Britain’s growth forecast, attributing it to a faster-than-anticipated decrease in inflation, which is steering the economy towards a "soft landing".
This development also allows the Bank of England leeway for three interest rate cuts this year.
In its yearly evaluation of the UK, the Washington-based fund projected economic growth to accelerate by 0.7 percent this year, an increase from last month's estimate of 0.5 percent. This upgrade follows a stronger-than-anticipated performance in the first quarter, during which the economy expanded at its fastest rate since 2022.
After slipping into a technical recession at the end of last year, the UK was now heading for a “soft landing”, where inflation was on course to fall without a big rise in unemployment, the IMF said.
Highlighting data indicating that Britain's economy, alongside Canada, was the fastest-growing in the G7 during the first quarter of this year, Rishi Sunak stated, "We've already seen evidence that the UK economy is returning to pre-pandemic levels. Inflation has decreased to just over 3 percent from the 11 percent rate when I assumed this role. This demonstrates that our strategy is effective, and the challenges of the past are behind us. I urge everyone to stay committed to the plan."
