Business · Economy · 5 hrs ago
IMF urges UK to stick with plans to repair public finances
The IMF urged Chancellor John Healey to keep narrowing the UK deficit in his first budget, due on 28 October.
Its economic counsellor, Silvana Tenreyro, said the UK stood out among G7 countries for having a plan to reduce its deficit.
The advice comes as Healey faces pressure to announce energy support before bills are expected to rise sharply in January.
The IMF says any energy help should be temporary and targeted, rather than broad subsidies.
It raised its forecast for UK growth this year to 1.3%, but lowered its 2027 forecast slightly to 1.2%.
Higher energy prices and interest rates are expected to weigh on growth and make it harder for households and businesses to spend and invest.
The IMF also expects UK inflation to remain above the Bank of England’s 2% target until late next year.
The IMF urged UK Chancellor John Healey to maintain his fiscal consolidation plans in his first budget later this month.
IMF economic counsellor Silvana Tenreyro said the UK stands out among G7 countries for having a plan to narrow its deficit.
The IMF forecast UK economic growth of 1.3% this year, up 0.3 percentage points from its July update.
It expects growth to slow to 1.2% in 2027 as higher energy prices and long-term interest rates weigh on activity.
The fund advised governments against across-the-board subsidies, saying support should be temporary, targeted and non-distortionary.
- Who
- The IMF and its economic counsellor, Silvana Tenreyro, addressed Chancellor John Healey.
- What
- The IMF urged Healey to maintain his fiscal consolidation plans at the budget. It also upgraded its UK growth forecast for this year.
- When
- The remarks were reported on 13 October 2026, ahead of Healey’s budget on 28 October.
- Where
- Tenreyro spoke at the IMF’s annual meetings in Bangkok.
- Why
- The IMF said the UK had begun a process to narrow its deficit. It also warned that higher energy prices and interest rates could weigh on growth.
This story does not have two clearly opposing sides.
The IMF’s previous update put UK growth at a lower forecast than its new projection of 1.3% for this year.
UK GDP grew by 0.6% in the first quarter and 0.5% in the second quarter.
Tenreyro urged the UK to stay the course as the IMF released its World Economic Outlook in Bangkok.
Healey was due to deliver his first budget.
- UK growth forecast for 2026
- 1.3%
- Change to 2026 forecast
- Up 0.3 percentage points from the July update
- UK growth forecast for 2027
- 1.2%, down from 1.3%
- UK budget date
- 28 October 2026
- UK average inflation forecast
- 3.3% in 2026 and 2.8% in 2027
What people are saying
The message for the UK is simply, stay the course.
The UK has already started a consolidation process.
conflict in the Middle East and Europe is hitting people in the UK and around the world. But Britain’s economy is showing strong international resilience in the face of these challenges.
Sources
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