THE UK is set to become the slowest growing economy among major developed nations next year, according to the International Monetary Fund (IMF).
The latest data from the IMF cut the UK’s growth projection from 1% in 2024 to 0.6%.
It is a rate of growth slower than Russia’s which, despite being hit by a host of international trade sanctions, is set to expand its economy by 1.1%.
Indeed, the UK is forecast to have the highest inflation and slowest growth among any G7 economy next year.
The IMF said the UK’s position “reflects tighter monetary policies to curb still-high inflation and the lingering impacts of the terms-of-trade shock from high energy prices".
Figures released by the UK Government last month estimate the country’s economy expanded by 4.3% in 2022, which is significantly higher than the IMF initially estimated.
Still, the IMF announcement will deflate ministers as they continue to try and tackle high-inflation rates, which remain above the government’s own targets.
The chancellor Jeremy Hunt said: “The IMF have upgraded growth for this year and downgraded it for next – but longer term they say our growth will be higher than France, Germany or Italy.
“To get there we need to deal with inflation and do more to unlock growth – which I will be focusing on in the upcoming Autumn Statement.”
IMF director of research Pierre-Olivier Gourinchas said: “The general perspective on the UK is that we have relatively subdued growth, we have falling momentum and we have a labour market which is cooling but inflation remains quite persistent.
“That is going to require monetary policy to remain tight for a little while longer into next year.”
