IMF raises UK growth forecast as it warns on tax and spending

The UK economy is forecast to grow slightly more than previously expected in 2025, but the International Monetary Fund (IMF) has warned that the Chancellor must stick to her rules on tax and spending.

In its annual health-check for the economy, the IMF predicted growth of 1.2% this year, rising to 1.4% in 2026.

It said an economic recovery was “under way” after a boost in the first three months of the year.

The forecast from the influential body comes just over a month after it downgraded its expectations for the UK from 1.6% in 2025 to 1.1%.

Luc Eyraud, the IMF’s UK mission chief, said growth had been “very strong” in the first three months of the year.

Official figures released this month revealed the economy was boosted by increases in consumer spending and business investment, but the figures were during the period before the US imposed import tariffs and UK employer taxes increased in April.