Rachel Reeves cannot blame Donald Trump’s trade war for the downgrade in the UK’s growth prospects, the International Monetary Fund (IMF) has said, as it warns that Britain’s inflation rate will be higher than in the US. The Telegraph has more.
The IMF said UK Government policies were stoking price pressures and would push Britain’s inflation rate to the highest in the G7. It means inflation in the UK will outstrip the US rate even as the President continues his tariffs onslaught.
While the IMF said “the impact of recent tariff announcements” would weigh on growth it added that “an increase in gilt yields, and weaker private consumption amid higher inflation as a result of regulated prices and energy costs” were also behind the decision to cut its UK growth forecasts.
The fund also downgraded its global growth projections over the next two years, warning that the trade war could wipe as much as $1 trillion (£750 billion) off the world economy.
The UK is now expected to grow by 1.1% this year and 1.4% in 2026, down from projections of 1.6% and 1.5% just three months ago.
In a further blow to Labour’s ambition to boost living standards, the IMF also said GDP per head – a better proxy than overall growth – would almost stagnate this year and barely rise in 2026. Sir Keir Starmer has pledged to raise living standards across the country this Parliament.
The IMF said weak UK growth at the end of last year played a key factor in its decision to downgrade its forecast for this year. The Chancellor’s £40bn Budget tax raid preceded growth grinding to a near-halt in the final three months of 2024.
It said higher prices owing to steep increases in energy, water and council tax bills would weigh on consumer spending.
The IMF blamed “the impact of recent tariff announcements, an increase in gilt yields and weaker private consumption amid higher inflation as a result of regulated prices and energy costs” for the decision to cut its UK growth forecasts.
The IMF forecasts will deal a blow to Ms Reeves’s attempts to balance the books. Lower growth and higher borrowing costs have already eroded the wafer-thin headroom she has to meet her borrowing rules, with even a small deterioration now enough to wipe out her £9.9 billion buffer.
Worth reading in full.
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When even the globalists at the IMF call out their idiocies they are surely dead meat?
You’d think so wouldn’t you – feels unusual for a left leaning government to be getting this kind of review from an org like the IMF tho… I wonder why they are really saying what they are saying?
Always a good question!
It really is awful looking at the reflection we cast. If that woman sat next to you in a cafe then you would adjust your plans and leave quickly and that is before you even heard the buzz-saw voice. Can you imagine her or any of her ilk reciting poetry or alluding to literature in any way or history or anything of value. In the world of inverted reality England surely tops the list even more so that the United States in terms of crap being consiredered good. American political discourse seems erudite these days compared to the discourse in British politics. Like British radio and television is aimed at seriously stunted and retarded people.
Back in 1980 I had an OK job in Central London, working as a Salesman at a VW dealer. On my salary I could afford a reasonable rented flat in Islington, I ran two classic cars, rented two lock-ups, had a horse in livery, holidays abroad, meals out, a girlfriend who I always treated to every hospitality, fuel to the country and back and saved for a deposit on a spacious two bed flat in Finsbury Park which cost me 60K.
My son and I did all the sums to see what gross pay he would need to earn today to match all that (let alone pay the mortgage on such a flat). It came to £175,000 p.a. The problem is NOT price inflation, it is the lack of wage inflation (he earns £50K and that doesn’t start to offer such opportunities).
The price of everything is based on demand and supply. If the supply exceeds demand the price drops. So do we have an over supply of workers for the few miserable jobs available today. Obviously we do.
Maybe
But someone is buying all this expensive stuff- who, and how can they afford it?
I did hope that the advent of working from home for those able to would trigger a rebalancing of property prices, making London and the surrounding areas more affordable, but it doesn’t seem to have had much effect
Both my kids have moved away from London – though they were happy enough to do
so
My son is commuting into London, reluctant to sign a lease with his job always at risk.
If you own property the scales tip the other way. And if you are willing to drown in debt you can kid yourself you’re flush.
I think the effect will soon enough be an exodus from the UK, especially those who lack family/cultural bonds.
I bet we see in decades to come swaths of abandoned commercial and residential buildings uneconomic to modify, maintain or restore.
We moved to a new much smaller and therefore cheaper office in London as our lease was conveniently up just after “Covid” – I was expecting leases to be going cheap but they weren’t. London still seems quite empty to me compared to how it was yet new office space is being built. I guess a lot of the offices are half empty because people are working from home more but equally bosses insist they go in a couple of days a week.
The whole thing is odd.
We need an A.I. to run the world for us
Hopefully a better one than the “AI” that just told me that two weeks long stay car parking at Gatwick would cost £1024 made up of the first day at £38 and the next 13 at £32 per day.
My Augmented Intelligence travel planner convinced me that using a taxi was a far better deal and service – and I must say it was right. The flight was delayed for 14hrs by the Heathrow power-down. I was totally bushed. A nice Mercedes with a can-do driver who worked it all out was shear luxury.
My AI is called my wife!
I use the same AI!
The car park was just an idle enquiry – we get a cab to a nearby station and get the train to Gatwick.
I don’t think people understand just how much wealth has been robbed from us by this agenda. It is a mistake to see it as a new agenda its driving spirit is the same as it always has been. Even before the recent Green agenda much of our mining was shut down in the 1960s and then before that this is essentially a continuation of the British Empire science of control. They knew from long experience exactly how many calories to give a person so that they can work but probably not think well. Protein is essential for full mental functioning. Carbohydrates are good for giving physical labourers a drip of energy. This carbohydrate model permeates the whole of British society and this is not by accident.
Rachel Reeves is running out of people to blame. She cannot blame the Conservatives as her budget ‘sorted out’ the inherited black hole. She cannot blame Trump because that has no backing from the IMF. She cannot blame Public Sector pay because her own Government chose to settle pay claims. She cannot blame Net Zero because that is sacred…
Poor Rachel must be spinning in circles trying to find someone else to blame.
Soon she’ll find herself in a hall of mirrors.
Or even better – out of a job. No guarantee that there is anyone better in the Student Union though.
They gave up looking for a better Chancellor – so they are now searching for a better liar. it seems there are quite a few candidates.
She will, at least, be able to look at the huge bags under her eyes. Thing not going too well, Rachel?
The record of the predictions of the IMF is pretty much like those from those such as the OBR and the BoE, usually completely wrong. I would expect their figures to be optimistic.