According to the International Monetary Fund (IMF), the UK’s economy is set to lag behind all other G7 nations next year, presenting challenges for Rishi Sunak in the upcoming election.
Here’s an overview by our economics expert, Szu Ping Chan:
The IMF indicates that increased interest rates are putting pressure on both households and businesses, leading them to reduce their 2024 UK growth projection from 1% to a mere 0.6%.
The organization also anticipates that the UK will experience the highest inflation rate within the G7 for both 2023 and 2024.
Mr Sunak is barely on course to achieve his target of reducing the primary rate by half by the end of the upcoming year.
It’s noteworthy that post the 2016 Brexit vote, IMF forecasts have often underestimated the UK’s economic growth. However, their projections for next year place the UK at the lowest rank in the G7 growth standings.
The recent World Economic Outlook report by the Fund attributes this drop in growth to rigorous monetary policies addressing the persisting high inflation and the lasting effects of trade shocks due to elevated energy prices.
