IMF warns Trump's tariffs are set to drag down UK economy next year
The International Monetary Fund (IMF) has warned that trade tensions stemming from planned US tariffs are set to dampen the UK 's economic growth next year.
Despite this, the global financial body has revised its growth forecast for the UK upwards for this year, following a period of robust economic activity.
The IMF has stated that the UK is experiencing an "economic recovery," with GDP expected to rise by 1.2 per cent this year, a step up from the 1.1 per cent growth it predicted in April.
On Tuesday, the organisation maintained its projection that the UK economy will expand by 1.4 per cent in 2026.
However, IMF economists said this will come despite global trade tensions wiping 0.3 percentage points off growth for the year.
Trade tensions will weigh on growth through 'persistent uncertainty, slower activity in UK trading partners, and the direct impact of remaining US tariffs on the UK', the IMF said.
It also highlighted that there is a greater risk that growth could be weaker than expected, due to the potential that global trade uncertainty will impact supply chains and weaken private investment.
Meanwhile, the IMF indicated that policy reforms by the UK Government to overhaul planning rules and loosen regulatory hurdles could support future growth.
'The authorities' structural reforms, including to planning, and the increase in infrastructure investment could increase potential growth if properly implemented,' its statement on the UK economy said.
Chancellor Rachel Reeves has made growing the economy a key priority for the Government in order to help fund future spending plans.
On Tuesday, the Chancellor said: 'The UK was the fastest growing economy in the G7 for the first three months of this year and today the IMF has upgraded our growth forecast.
'We're getting results for working people through our plan for change – with three new trade deals protecting jobs, boosting investment and cutting prices, a pay rise for three million workers through the national living wage, and wages beating inflation by £1,000 over the past year.'
Earlier this month, the Bank of England predicted that the UK economy would grow by 1 per cent in 2025 and 1.25 per cent next year, as it reduced interest rates to 4.25 per cent – their lowest level since May 2023.
The IMF said the central bank should 'continue to ease monetary policy gradually', indicating it expects further reductions in interest rates.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
North Wales Chronicle
11 minutes ago
- North Wales Chronicle
Starmer focused on grooming victims not ‘grandstanding', says Reeves
The Chancellor said that Sir Keir has been looking at 'actually doing the practical things to ensure that something like this never happens again'. After initially resisting pressure to implement a full probe, the Prime Minister said he had read 'every single word' of an independent report into child sexual exploitation by Baroness Louise Casey and would accept her recommendation for the investigation. Home Secretary Yvette Cooper is set to address Parliament on Monday about the findings of the review. Reform UK leader Nigel Farage described the move as a 'welcome U-turn', while Kemi Badenoch called on him to apologise for 'six wasted months'. Asked whether the Prime Minister had changed his mind about the idea of a national inquiry, the Chancellor told the Sunday With Laura Kuenssberg programme: 'I think Keir Starmer, our Prime Minister, has always been really focused, as he was when he was director of public prosecutions, on the victims and not grandstanding. 'But actually doing the practical things to ensure that something like this never happens again, but also to ensure that the victims of this horrific abuse over many, many years is got to grips with and that people have answers to their questions.' Earlier this year, the Government dismissed calls for a public inquiry, saying its focus was on putting in place the outstanding recommendations already made in a seven-year national inquiry by Professor Alexis Jay. Shadow chancellor Sir Mel Stride criticised the Government's 'very late' decision to launch the inquiry, and claimed it had only come after pressure from the Tories. Sir Mel told BBC One's Sunday With Laura Kuenssberg: 'It's a very late decision – it should have happened far, far earlier. 'We've been calling for this for many, many months.' He accused Sir Keir of previously dismissing concerns from senior Tory figures. 'Kemi Badenoch, Chris Philp and others have been derided by the Prime Minister for hopping on some kind of far-right bandwagon, dog-whistle politics and the rest of it,' Sir Mel said. 'That was the wrong response. This is just another example of the Prime Minister being pressurised by us into U-turning.' The inquiry will be able to compel witnesses to give evidence, and it is understood that it will be national in scope, co-ordinating a series of targeted local investigations. Speaking to reporters travelling with him on his visit to Canada on Saturday, the Prime Minister said: 'I have never said we should not look again at any issue. 'I have wanted to be assured that on the question of any inquiry. 'That's why I asked Louise Casey who I hugely respect to do an audit. 'Her position when she started the audit was that there was not a real need for a national inquiry over and above what was going on. 'She has looked at the material she has looked at and she has come to the view that there should be a national inquiry on the basis of what she has seen. 'I have read every single word of her report and I am going to accept her recommendation. 'That is the right thing to do on the basis of what she has put in her audit.'
North Wales Chronicle
12 minutes ago
- North Wales Chronicle
Grooming gangs inquiry ‘must not delay action' against child abuse, says NSPCC
The Prime Minister said on Saturday that he had read 'every single word' of an independent report into child sexual exploitation by Baroness Louise Casey and would accept her recommendation for the investigation. The National Society for the Prevention of Cruelty to Children (NSPCC) said it is 'pleased' with the decision – but added that a full national probe 'must not delay' urgent Government action. 'We are pleased to see the Prime Minister engaging with the recommendations set out in the Casey Review and will also read it line by line when it is published,' NSPCC chief executive Chris Sherwood said. 'But a national inquiry into abuse by organised networks must not delay urgent action on child sexual abuse that is long overdue. 'Survivors have already waited more than two years for the important recommendations from the Independent Inquiry into Child Sexual Abuse (IICSA) to be implemented,' Mr Sherwood added. The IICSA, chaired by Professor Alexis Jay, found institutional failings and tens of thousands of victims across England and Wales. The seven-year probe made 20 recommendations in the final report published in 2022, as it described child sexual abuse as an 'epidemic' across the two nations. Earlier this year, the Government dismissed calls for a public inquiry into the grooming gangs scandal, saying its focus was on putting in place the outstanding recommendations already made in the IICSA. Mr Sherwood said the Government now has the opportunity to make tackling child sexual abuse 'a non-negotiable priority'. 'Child sexual abuse and exploitation by groups of offenders is deeply insidious and devastates lives,' he said. 'Now is the moment for this Government to take concerted action by making child safeguarding a non-negotiable priority. 'This means joined up work to prevent child sexual abuse across all public, private, and voluntary sector agencies and mandatory training so all those working with children can identify the signs of abuse, step in and stop offenders in their tracks. 'Most of all it means supporting victims and survivors by investing in life-changing therapeutic and recovery services and ensuring the justice system can cope with the current backlog of child sexual abuse cases in court.' Following the Prime Minister's announcement on Saturday, Reform UK leader Nigel Farage described the move as a 'welcome U-turn', while Conservative Party leader Kemi Badenoch called on him to apologise for 'six wasted months'. 'Just like he dismissed concerns about the winter fuel payment and then had to U-turn, just like he needed the Supreme Court to tell him what a woman is, he had to be led by the nose to make the correct decision here,' she said. 'I've been repeatedly calling for a full national inquiry since January. It's about time he recognised he made a mistake and apologised for six wasted months.' Speaking to reporters on Saturday while on his visit to Canada, Sir Keir said: 'I have never said we should not look again at any issue. I have wanted to be assured that on the question of any inquiry. That's why I asked Louise Casey who I hugely respect to do an audit. 'Her position when she started the audit was that there was not a real need for a national inquiry over and above what was going on. 'She has looked at the material she has looked at and she has come to the view that there should be a national inquiry on the basis of what she has seen. 'I have read every single word of her report and I am going to accept her recommendation. 'That is the right thing to do on the basis of what she has put in her audit.'
The Sun
16 minutes ago
- The Sun
McDonald's launching five new menu items in DAYS – including returning favourite and ‘iconic' burger
MCDONALD'S is set to launch five new menu items in just days – including the return of a fan favourite. The Big Arch will make its debut on the fast-food chain's menu on June 18, with four other items expected to be added. 5 5 Halloumi Fries, which first launched in 2022, will make its long-awaited return to the menu later this month. Fans of the popular chain will also be excited to hear that the Toffee Crisp McFlurry, Cheesy McCrispy and Toffee Apple Pie will be returning. McDonald's new Big Arch burger will cost £7.99 or £9.99 for a medium meal. Costing just £2.39, the Toffee Crisp McFlurry is set to be a fan favourite. The Cheesy McCrispy costs £6.69 on its own or £8.49 for a medium meal. Halloumi Fries will set back customers just £2.99, while a larger sharebox costs £7.59. Both come with sweet chilli dip sauce. Sweet treat lovers will be delighted to hear that the Toffee Apple Pie, featuring crispy pastry filled with rich toffee sauce, will be scanning for just £2.09. The Katsu Wraps, which come with grilled or crispy chicken and launched for the first time in January, are also staying on menus from June 18. Shoppers can pick up the wrap for £3.49 by itself or £2.29 on Wednesdays and Saturdays. Customers can also pick it up as part of a medium meal for £5.29. It's worth bearing in mind, prices for all the menu items may vary from restaurant to restaurant. We have asked McDonald's for calorie information for all the new menu items and will update this story when we have heard back. Full list of new menu items Big Arch - £7.99 Big Arch medium meal - £9.99 Big Arch large meal - £10.79 Cheesy McCrispy - £6.69 Cheesy McCrispy medium meal - £8.49 Cheesy McCrispy large meal - £9.29 Toffee Crisp McFlurry - £2.39 Halloumi Fries (four-piece) - £2.99 Halloumi Fries Sharebox - £7.59 Toffee Apple Pie - £2.09 These are the four items coming off menus on June 17: Cheesy Garlic Bread Dippers Lotus Biscoff McFlurry Steakhouse Stack McSpicy® x Frank's RedHot The update from McDonald's today comes after the fast food chain had customers fuming over a discontinued item. It confirmed it axed its Chicken Bacon Caesar Wrap from menus in May as part of a "rotation" of its wrap offering. The wrap, which combined chicken breast strips, crispy onions, rashers of bacon and lettuce, was first launched in summer 2023. How to save money at McDonald's Research by The Sun found a Big Mac meal can be up to 30% cheaper at restaurants just two miles apart from each other. You can pick up a Big Mac and fries for just £2.99 at any time by filling in a feedback survey found on McDonald's receipts. The receipt should come with a 12-digit code which you can enter into the Food for Thought website alongside your submitted survey. You'll then receive a five-digit code which is your voucher for the £2.99 offer. There are some deals and offers you can only get if you have the My McDonald's app, so it's worth signing up to get money off your meals. The MyMcDonald's app can be downloaded on iPhone and Android phones and is quick to set up. You can also bag freebies and discounts on your birthday if you're a My McDonald's app user.
