The IMF now expects the UK to avoid a recession

FAN Editor

The U.K. will avoid recession in 2023, according to the IMF.

George Johnson | Moment | Getty Images

LONDON — The International Monetary Fund said Tuesday that it expects the U.K. to avoid entering a recession and “maintain positive growth” in 2023.

The Fund said resilient demand in the context of declining energy prices had encouraged the positive, if “subdued” outlook.

related investing news

These 4 global commercial property stocks are set to tumble, says short-seller


The United Nations financial agency noted that British economic activity had seen a significant slowdown, compared to last year, and that inflation, which is currently at 10.1%, remains “stubbornly high.” The U.K. economy continues to feel the impact of Russia’s full-scale invasion of Ukraine, along with lingering supply scarring from the Covid-19 pandemic.

The IMF said that the U.K. had weathered the recent global banking stresses well, alluding to the recent collapse of Credit Suisse and to turmoil in the sector in the U.S.

The agency report described the U.K. continued financial stability as a “global public good” and recommended evidence-based reforms for London that address the post-pandemic rise in labor inactivity, regulation uncertainty around business investment, and accelerating the country’s green transition.

The Tuesday note provided a more positive development for the U.K. than did the agency’s World Economic Outlook of April. The previous month’s forecast suggested that U.K. growth would shrink by 0.3% in 2023, making it the worst performer in the G20 group. The latest release suggests U.K. growth will now reach 0.4% this year — a 0.7 percentage point upgrade from the previous projection.

 The IMF maintains that U.K. GDP will likely grow by 1% in 2024, and then by around 2% in 2025 and 2026.

Although somewhat downbeat, recent reports are more temperate than the IMF statement of September, when the organization suggested that fresh measures laid out by the newly-elected British government would “likely increase inequality.” Many of those economic measures were then scrapped, with then-Prime Minister Liz Truss leaving the role within 44 days of taking office.

Free America Network Articles

Leave a Reply

Next Post

PacWest Bancorp’s plan to sell $2.6 billion real estate loans calms investors

(Reuters) – PacWest Bancorp’s shares climbed 13% in premarket trading on Tuesday, extending gains from the previous session after the bank’s plan to sell $2.6 billion worth of its loan portfolio to build capital fueled optimism among investors. Earlier this month, the bank had said it was exploring strategic asset […]