IMF cuts UK GDP growth forecast for 2025–2026 amid trade shocks

The International Monetary Fund (IMF) has slashed its UK economic growth forecasts for the next two years more sharply than for any other major European country. According to the organization’s experts, US trade tariffs could pose serious risks to the global economy.

The IMF also urged heavily indebted nations to tighten fiscal policy in order to safeguard budget stability. This applies to the UK as well, where increased government spending has driven up borrowing costs.

However, the IMF cautions that in today’s highly uncertain environment, any forecasts could quickly become outdated. Among G7 nations, the UK GDP is projected to grow faster over the next two years than those of Germany, France, or Italy. The British economy is expected to expand by 1.1% in 2025 and 1.4% in 2026 trailing only the US and Canada in growth rates.

To stabilize the debt by 2028, the UK government will need to find 60 billion pounds ($79.8 billion) in savings. The IMF is urging British authorities to maintain strict fiscal discipline and avoid taking on additional debt.