IMF revises up UK growth forecast for 2025
LONDON: The International Monetary Fund slightly upgraded its UK growth forecast for this year but warned over fallout from US tariff threats as it held its estimate for 2026.
Britain's economy is expected to expand 1.2 per cent in 2025, up from 1.1 per cent estimated last month, the IMF said in its latest outlook document for the UK, partly citing "very strong" first-quarter growth on better-than-expected business investment.
It warned, however, that global trade tensions would hit UK growth by 0.3 per cent for the remainder of this year.
This is due to "persistent uncertainty, slower activity in UK trading partners, and the direct impact of remaining US tariffs on the UK", the IMF said.
The Fund held its forecast that the UK economy would grow by 1.4 per cent in 2026.
Britain's Labour government welcomed the updated figure, with finance minister Rachel Reeves emphasising that three recently-struck trade agreements — with the US, EU and India — would help with "protecting jobs, boosting investment and cutting prices".
The UK and the United States this month reached a post-Brexit deal which reduces tariffs on British cars and removes those on steel and aluminium.
Britain in return will open up markets to US beef and other farm products. But a 10-per cent levy imposed on the UK remains in tact as part of Donald Trump's tariffs blitz on key trading partners.
The IMF added that the three trade deals are "just first steps".
"We see them as very important at the sectoral level, but not necessarily impacting massively or significantly our forecast," IMF mission chief to the UK Luc Eyraud said in a press briefing.
The Fund added that "persistently weak productivity remains the UK's primary obstacle to lifting growth and living standards".
British gross domestic product expanded by 0.7 percent in the January-to-March period, official data showed. The Bank of England has raised its UK growth forecast for this year but downgraded expectations for 2026 as it warned of heightened economic unpredictability amid Trump's tariffs. — AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times of Oman
14 hours ago
- Times of Oman
India-US bilateral trade agreement negotiations resume in Delhi: Piyush Goyal
Brescia [Italy]: The next round of negotiations for the India-United States Bilateral Trade Agreement commenced in Delhi, with US trade team officials in the capital engaging in crucial discussions aimed at strengthening economic ties between the two nations. In an exclusive interview with ANI, Commerce and Industry Minister Piyush Goyal confirmed that US trade team officials have reached India, with additional team members expected to arrive soon to participate in the negotiations. The talks come against the backdrop of recent statements by Goyal in Paris on June 1, where he outlined that India and the United States are working toward providing preferential market access to their respective businesses. Teams from both nations are actively collaborating on the proposed bilateral trade agreement framework. When asked about US President Donald Trump's announcement to increase tariffs on steel and aluminium to 50 percent, Goyal indicated that both countries remain committed to addressing trade issues through bilateral dialogue. "Let us wait and watch... both the US and India share good relations and we will continue to work together to resolve all these issues bilaterally," Goyal said. The current negotiations build upon commitments made in February, when US President Donald Trump and Prime Minister Narendra Modi announced plans to negotiate the initial phase of a comprehensive, multi-sector Bilateral Trade Agreement. The timeline targets completion by fall 2025. The proposed agreement is ambitious in scope, seeking to dramatically expand bilateral trade from the current $191 billion to $500 billion by 2030. This represents more than a doubling of trade volumes between the world's largest democracy and its most powerful economy. The negotiations in Delhi mark a significant step forward in what both nations view as a strategic economic partnership, with potential implications for global trade patterns and supply chain configurations in key sectors including technology, pharmaceuticals, defence, and agriculture.
Times of Oman
14 hours ago
- Times of Oman
Trump-Musk feud gets nastier
Washington, DC: The public breakdown between US President Donald Trump and Tesla CEO Elon Musk grew exponentially more bitter on Thursday, transforming what was once a powerful political alliance into a vicious war of words that has wiped billions from Tesla's market value and threatens to derail the president's flagship budget legislation. The feud reached its peak when Musk made explosive allegations about Trump's connection to disgraced financier Jeffrey Epstein, marking a dramatic escalation in their increasingly personal conflict. The fued between the two men got nastier, less than a week after Musk officially left his position spearheading the quasi-official Department of Government Efficiency. The latest round of hostilities erupted during an Oval Office meeting with German Chancellor Friedrich Merz, when Trump was asked about Musk's criticism of his signature budget legislation. "Elon and I had a great relationship. I don't know if we will any more," Trump told reporters, his disappointment evident. The president expressed his frustration more directly, saying: "I'm very disappointed in Elon. He knew every aspect of this bill. He knew it better than almost anybody, and he never had a problem until right after he left." Trump continued his criticism, adding: "He said the most beautiful things about me, and he hasn't said bad about me personally, but I'm sure that'll be next, but I'm very disappointed in Elon. I've helped Elon a lot." Musk's response on X was swift and defiant, flatly contradicting the president's account. "False, this bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!" he wrote, before escalating the personal attack by claiming that without him Trump would have "lost the election" and bemoaning what he called "such ingratitude". But Thursday brought a far more acrimonious and personal tone to the exchanges when Musk launched his most damaging attack yet. In a jaw-dropping social media post, Musk alleged that Trump's name "is in the Epstein files. That is the real reason they have not been made public." The tech billionaire amplified his attack by reminding his 220 million followers of Trump's quote about Epstein from a New York magazine profile more than two decades ago: "He's a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side." Musk concluded his post with a gleeful taunt: "Have a nice day, DJT!" and suggested marking the post "for the future. The truth will come out." The exchange rapidly devolved into a series of increasingly serious threats. Trump responded by threatening to terminate Musk's lucrative government subsidies and contracts, prompting the SpaceX boss to counter with his own nuclear option: potentially decommissioning the Dragon spacecraft that had recently rescued astronauts stranded on the International Space Station for months. The threat could throw US space programmes into chaos, highlighting how deeply intertwined Musk's business empire has become with critical government operations. As the feud intensified, Musk crossed into unprecedented territory by suggesting Trump should be impeached and that JD Vance should replace him as president. Right-wing influencer Ian Miles Cheong, who has 1.2 million followers on X, posted that "my money's on Elon" in the battle between Musk and Trump, asserting that "Trump should be impeached and JD Vance should replace him." Less than 30 minutes later, Musk reposted Cheong's message, adding simply: "Yes." Musk also warned that Trump's global tariffs would "cause a recession in the second half of this year" and launched an online poll asking whether a new political party should be formed, moves that are certain to enrage the president. Tesla shares plummeted more than 14 per cent on Thursday alone, erasing approximately USD 152 billion from the company's value and reducing it to roughly USD 900 billion. The decline knocked USD 8.73 billion off Musk's personal net worth according to the Bloomberg Billionaires Index, demonstrating how quickly political feuds can translate into economic consequences. Trump also took to his social media platform Truth Social to fire fresh salvo against Musk. In a post on Truth Social, he stated, "I don't mind Elon turning against me, but he should have done so months ago. This is one of the Greatest Bills ever presented to Congress. It's a Record Cut in Expenses, USD 1.6 Trillion Dollars, and the Biggest Tax Cut ever given. If this Bill doesn't pass, there will be a 68 per cent Tax Increase, and things far worse than that. I didn't create this mess, I'm just here to FIX IT. This puts our Country on a Path of Greatness. MAKE AMERICA GREAT AGAIN." Trump stated that he told Musk to leave and took away his Electric Vehicle (EV) Mandate that forced everyone to purchase electric cars. "Elon was "wearing thin," I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY," he posted on Truth Social. In response to Trump post, Elon Musk on X wrote, "Such an obvious lie. So sad." He made this statement in response to a post shared by a user named Autism Capital on X. The user had shares screenshot of Trump's post and mentioned, "Trump fires back at Elon. The online battle begins." Trump even threatened to terminate Elon Musk's governmental subsidies and contracts. "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts. I was always surprised that Biden didn't do it," Trump posted on Truth Social. Elon Musk also reposted the post shared by a social media user Kaizen D Asiedu on X. In response to Trump's statement on the "big beautiful bill", Aseidu stated, "What a waste of time by our President. Rather than making this about Elon, he should simply make clear: 1. The conditions under which this bill will reduce the deficit. 2. How he will create those conditions. He was elected to lead, not fight with citizens." Trump, in his earlier remarks, had blamed Musk's public displeasure on legislative proposals that would strip away tax incentives to buy electric vehicles. Musk vehemently denies this is the reason for his break with Trump, but the president's propensity to seek vengeance on those who cross him makes it very plausible that Musk's companies will have a target on their backs. The conflict threatens to derail Trump's centerpiece legislation, which he calls the "big, beautiful bill". Musk has trained his fire not just on Trump but also on Speaker Mike Johnson and Senate Majority Leader John Thune, resurfacing past comments where they lamented the dangers of letting government spending spiral out of control. In characteristically fiery style, Musk contended in one Thursday afternoon post that "Congress is spending America into bankruptcy!" The budget bill in its current form is projected to add USD 2.4 trillion to the deficit over 10 years, according to the nonpartisan Congressional Budget Office.
Times of Oman
14 hours ago
- Times of Oman
Tesla shares fall amid public feud between Musk, Trump
Washington, DC: Shares in Tesla plummeted on Thursday as Tesla CEO Elon Musk and US President Donald Trump fired salvos at each other amid fallout, The Hill reported. Tesla closed with a 14.6 per cent loss as the market closed on Thursday. Trump expressed disappointment over Musk's criticism of the bill while Tesla's CEO accused the US president of "ingratitude". Tensions between Musk and Trump erupted after the former's criticism of US President's tax and spending bill. Last week, Musk officially departed the Trump administration after a brief tenure as he headed the Department of Government Efficiency (DOGE). Amid the fallout with Trump, Elon Musk has claimed that US President's name is mentioned "in the Epstein files" and added that it is the "real reason they have not been made public." In a post on X, Musk stated, "Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT." In another post on X, Musk stated, "Mark this post for the future. The truth will come out." Names of powerful people previously related to convicted sex offender and financier Jeffrey Epstein, who died by suicide in Manhattan jail in 2019, including Trump, Prince Andrew and former US President Bill Clinton, have been named in court documents associated with Epstein's years of sexual abuse, The Hill reported. Before being elected in November, Trump said that he would have "no problem" releasing files related to Epstein, something some lawmakers have demanded on social media following Epstein's death. In 2024, Trump denied any association with Epstein. Musk's allegation came just minutes after Trump threatened to cancel government contracts with Musk's companies. Musk stated that considering Trump's cancellation of government contracts with Tesla, SpaceX will begin decommissioning its Dragon spacecraft immediately. "In light of the President's statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately," Musk posted on X. In a post shared on his social media platform Truth Social, Trump stated, "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts. I was always surprised that Biden didn't do it." Musk has criticised Trump's "big beautiful bill", urging Americans to lobby Congress to "KILL the BILL. In response to his criticism, Trump stated that he was "very surprised." During his meeting with German Chancellor Friedrich Merz, Trump said, "Elon and I had a great relationship. I don't know if we will anymore." When asked about Elon Musk's criticism of tax policy bill, Trump said, "I've always liked Elon and that's why I was very surprised. You saw the words he had for me. The words are great. And he hasn't said anything about me that's bad. I'd rather have him criticize me than the bill because the bill is incredible. It's the biggest cut in the history of our country. We've never cut. It's about 1.6 trillion in cuts. It's the biggest tax cut. Tax, you would say, people's taxes will go way down, but it's the biggest tax cut in history. We are doing things in that bill that are unbelievable. And when you look at what we're doing for small businesses, for people, for middle-income people, all of the things we're doing, nobody's ever seen anything like it." "And, you know, Elon's upset because we took the EV mandate, which was a lot of money for electric vehicles. And, you know, they're having a hard time with the electric vehicles, and they want us to pay billions of dollars in subsidy. Elon knew this from the beginning. He knew it for a long time ago. That's been in there. That's been, I would say, JD, that hasn't changed. That's been right from the beginning. I think, Mr. Secretary, that hasn't changed at all, right from the beginning. But I know that it disturbed him," he added. Trump stated that Musk recommended a Democrat to run NASA and he did not agree to it. He said, "He wanted and rightfully, he recommended somebody from, that he, I guess, knew very well. I'm sure he respected him, but to run NASA. And I didn't think it was appropriate. And he happened to be a Democrat, like, totally Democrat. And I say, you know, look, we won. We get certain privileges, and one of the privileges went out to appoint a Democrat. NASA is very important. We have great people. General Kane is going to be picking somebody with, we'll be checking him out, seeing -- but he wanted that person, a certain person, and we said no. And, yeah, I can understand why he's upset." Trump mentioned that Musk endorsed him and campaigned for him and he is "disappointed" as Tesla CEO knew the inner workings of the tax bill better than anyone sitting here. He said, "Elon endorsed me very strongly. He actually went up and campaigned for me... But I'm very disappointed because Elon knew the inner workings of this (tax) bill better than almost anybody sitting here. He knew everything about it. He had no problem with it. All of a sudden, he developed the problem when he found out that we're going to have to cut the EV mandate, because that's billions and billions of dollars, and it really is unfair. We want to have cars of all types. We want to have gasoline, combustion, hybrids. We want to be able to sell everything... If you saw the statements he made about me. He said the most beautiful things about me, and he hasn't said bad about me personally, but I'm sure that'll be next. I'm very disappointed in Elon. I've helped Elon a lot..." To these remarks, Musk replied on X, "False. This bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!" He even called out Trump for ingratitude as the two disagreed on the latest US bill. He also said, "Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate." "Such ingratitude", Musk posted on X. Musk even conducted a poll on X, asking whether the US needs a new political party 'that actually represents the 80 per cent in the middle'. Musk has spent at least USD 250 million in the presidential election last year boosting Trump's campaign. He even played a key role in the Trump administration as the DOGE head, The Hill reported. His work in the administration weighed heavily on his companies, especially Tesla, which saw its stock plummet in the early months of the Trump administration. The shares have recovered in recent weeks as Musk announced exit from the administration.
