The International Monetary Fund (IMF) has cautioned that UK interest rates are unlikely to drop below 3.5 per cent for the next four years at least.
According to the IMF, Britain is expected to achieve its inflation target of 2 per cent soon, with GDP growth ranking among the highest among major Western economies.
The IMF also predicted that GDP per capita in the UK would experience slower growth compared to the US, Germany, France, and Japan, attributed to a rapid population increase fueled by immigration.
It cautioned against additional unfunded tax cuts. Additionally, the IMF's latest World Economic Outlook forecasts a decline in interest rates from the current 5.25 per cent level over the next year.
According to the fund, interest rates will stabilise at 3.5 per cent, significantly higher than pre-2021 levels, until at least the end of 2028. This implies that borrowing costs in the UK will remain higher compared to America, the EU, or Japan. The UK's economy is forecasted to grow by 0.5 per cent this year and 1.5 per cent next year, outpacing most other G7 member states.
However, on a per-capita basis, UK GDP is expected to be weaker this year and next compared to the majority of G7 allies, surpassing only Italy and Canada.
