UK outlook upgraded by IMF but remains second slowest G7 economy
investmentweek.co.ukThe IMF said the improvement was a result of 'stronger-than-expected consumption and investment from the confidence effects of falling energy prices'.
This compares to a 0.3% contraction initially predicted in April, when the UK was forecast to be the worst performing economy in the world. In its latest assessment of global economic prospects, the IMF said the improvement was a result of «stronger-than-expected consumption and investment from the confidence effects of falling energy prices».
IMF: UK expected to avoid recession in 2023
It added the Windsor Framework agreement, announced by Rishi Sunak in February, had also helped trade between Northern Ireland and Great Britain thanks to «lower post-Brexit uncertainty». However, despite the upgrade, Britain remains in the slow lane as it still has the highest headline rate of inflation of the G7 economies, the highest rate of core inflation and, along with Germany, was the last advanced economy to return to its pre-pandemic size. Germany's economy is now expected to shrink by 3% this year, contradicting Chancellor Olaf Scholz's insistence that the country would avoid a contraction. The IMF said a «weakness in manufacturing output» was to blame for the forecast, which had been downgraded from a 0.1% reduction. The forecast positioned the UK as the second slowest G7 economy this year ahead of Germany, and the joint- second slowest next year, ahead of Italy and in line with US and Japan.
IMF: Rate hikes are eroding trust in financial institutions
Looking at the bigger global picture, things seem more optimistic as food and energy prices have fallen, inflation is in decline and the Covid-19 pandemic is firmly behind. The IMF upgraded its global growth
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