IMF anticipates that the UK will escape a recession.
The International Monetary Fund has predicted that the UK economy will develop strongly this year and avoid entering a recession.
Now, compared to last month, it projects that the UK’s economy would expand by 0.4% in 2023.
“Resilient demand” and declining energy prices would support growth.
But according to the IMF, inflation “remains stubbornly high” and must be reduced by maintaining higher interest rates.
IMF managing director Kristalina Georgieva said in a speech in London that the revised GDP figure was brought on by declining energy costs, easing Brexit concerns, and increased financial stability.
She continued by saying that the government had recently “taken decisive and responsible steps.”
However, Ms. Georgieva also cautioned that now was not the time to consider tax cuts, stating that “neither is it affordable, nor is it desirable” at the present.
The UK economy faced “considerable” risks, according to the IMF assessment, with “greater than anticipated persistence in price- and wage-setting” posing the greatest threat because it would keep inflation high for longer.
Additionally, it stated that the UK must handle the record number of individuals who are unemployed, many of whom suffer from chronic conditions.
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Chancellor Jeremy Hunt stated that the study “credits our action to restore stability and tame inflation”.
The IMF confirms that our long-term economic prospects are better than those of Germany, France, and Italy if we follow the plan.
The research, according to Pat McFadden, the shadow chief secretary to the Treasury for Labour, “highlights the slowdown in economic activity since last year and stubbornly high prices,” and reveals “the fragility of the UK economy.”