"The IMF cut its forecast for UK GDP growth this year to 0.8 per cent, down from 1.3 per cent predicted as recently as January. Expectations for 2027 have also been revised lower, from 1.5 per cent to 1.3 per cent, signalling a weaker medium-term recovery."
"Rising prices are expected to remain a central challenge. Inflation is now forecast to average 3.2 per cent in 2026, significantly above earlier estimates of 2.5 per cent, and still well above the Bank of England's 2 per cent target."
"At the heart of the deteriorating outlook is a sharp rise in energy costs triggered by instability in the Middle East. Disruption to supplies, including the effective blockade of the Strait of Hormuz, has driven oil and gas prices higher, feeding through into fuel and food costs."
"The IMF warned that, in a worst-case scenario, a global recession is now a 'close call' if the conflict escalates further. Such an outcome would mark only the fifth time since 1980 that global growth has fallen below 2 per cent."
The IMF has downgraded the UK's GDP growth forecast for this year to 0.8%, down from 1.3%. Inflation is expected to average 3.2% in 2026, above the Bank of England's target. Unemployment is projected to rise to 5.6%. The economic decline is attributed to rising energy costs from Middle East instability, with petrol prices increasing by 19% and diesel by over a third. A global recession is a possibility if the conflict escalates further.
Read at London Business News | Londonlovesbusiness.com
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