Lighted porches of old terraced houses are visible through the branches of trees in Ruskin Park and in the distance, the growing development at Nine Elms in London, England, on May 14, 2024.
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LONDON – The International Monetary Fund on Tuesday raised its 2024 growth forecast for Britain to 0.7% from 0.5%, giving a further boost to the country’s economy. New government,
Looking ahead, the Washington, DC-based IMF reiterated its forecast for UK growth of 1.5% in 2025 in the July update of its World Economic Outlook.
This upgrade comes after two years of stagnation, with the UK set to fall into a shallow recession in the second half of 2023. However, GDP growth has declined in May higher than analysts expected at 0.4%, while including summer events euro 2024 football championship Even more Taylor Swift’s Eras Tour This is expected to boost economic activities.
Investment bank Goldman Sachs earlier this month pushed its forecast to 2025 The U.K. economy’s growth rose 0.1 percentage points to 1.6%, citing fiscal plans by the new Labor government led by Prime Minister Keir Starmer, which include planning reforms and closer trade ties with the European Union.
Deutsche Bank on Friday joined Goldman Sachs in raising its outlook for Britain. Economists said in a note that they now expect GDP growth to be 1.2% this year, up from their previous forecast of 0.8%.
Deutsche Bank said the country’s GDP in May reflected strength in the business services and construction sectors, and the Euro tournament is expected to provide a further boost to hospitality and leisure.
Meanwhile, analysts at Jefferies said, Recent Note The UK would appear “relatively stable” due to the Labour Party’s parliamentary majority, and combined with regulatory reform could increase the attractiveness of assets in the country.
This comes at a time when the Bank of England is expected to start cutting interest rates in the coming months. Inflation in Britain has affected the central bank’s gross domestic product (GDP). 2% target The rate was 1.9% in May, and economists surveyed by Reuters expect the rate to fall further to 1.9% in Wednesday’s data.
Other economies whose growth forecasts for 2024 were upgraded by the IMF on Tuesday include the euro zone, which saw its growth rate rise 0.1 percentage point to 0.9%, Spain, which saw its growth rate rise 0.5 percentage points to 2.4%, and China, which saw its growth rate rise 0.4 percentage points to 5%.
It lowered its forecast for the US economy by 0.1 percentage points to 2.6%.
The organisation estimates worldwide growth will be 3.2% this year, and said global activity and world trade remained robust, particularly driven by strong exports from Asia.
However, she warned that the services sector was broadly holding back the disinflation process, complicating monetary policy decisions.
“Risks to inflation have thus increased, raising the possibility that interest rates may remain higher for even longer in a context of rising trade tensions and growing policy uncertainty,” the IMF said in its World Economic Outlook.
— CNBC’s Sophie Kiderlin and Vicki McKeever contributed.
