The International Monetary Fund (IMF) has released its annual review of the UK economy and the message this year is more positive than many might have expected. The IMF has upgraded its forecast for UK growth in 2025 to 1.2%, noting that “an economic recovery is underway.”
While this may not be headline-grabbing growth, it’s a step up from earlier projections and a shift in tone from what has often been a cautious outlook.
Putting Things in Perspective
While the growth upgrade is welcome, it’s worth keeping in perspective. A forecast of 1.2% for 2025 is still relatively modest, and there are ongoing pressures to consider. These include inflation, which came in above expectations at 3.5% in April.
However, the IMF have expressed support for the government’s fiscal strategy, describing it as striking “a good balance between supporting growth and safeguarding fiscal sustainability.”
The IMF also noted that weak productivity continues to be a problem, but they feel the government’s Growth Mission stands a good chance of reversing this trend.
What Businesses Might Take from This
Growth forecasts matter for confidence. Even modest upgrades in official forecasts can shape investor sentiment, lending conditions, and customer demand.
Greater confidence could translate into more sales opportunities for your business.
Looking Ahead
The full IMF report will be published later this summer. In the meantime, the latest update is a reminder that despite ongoing challenges, the outlook for 2025 could improve.
If you’d like help reviewing your financial plans and forecasts, please get in touch. We’re always happy to talk things through and help you achieve a positive 2025.
