Commercial tensions linked to US rates plans will reduce the economic growth of the United Kingdom next year, according to the International Monetary Fund (IMF).
However, the global economy agency improved its prognosis for the United Kingdom economy this year after strong growth in recent months.
The IMF said that an “economic recovery is underway” in the United Kingdom, with GDP (gross domestic product) that will increase by 1.2% this year.
In April, the organization had previously indicated a 1.1% growth for the year.
On Tuesday, the organization also maintained its prediction that the United Kingdom's economy will grow by 1.4% in 2026.
However, body economists said this will come in spite of global commercial tensions that clean 0.3 percentage points of the growth of the year.
Commercial tensions will weigh on growth through “persistent uncertainty, slower activity in the United Kingdom's commercial partners and the direct impact of the remaining American tariffs in the United Kingdom,” said the IMF.
He also stressed that there is a greater risk that growth can be weaker than expected, due to the potential that world commercial uncertainty will impact supply chains and weaken private investment.
Meanwhile, the IMF indicated that the United Kingdom Government policy reforms to review the planning rules and loosen regulatory obstacles could support future growth.
“The structural reforms of the authorities, even for planning, and the increase in infrastructure investment could increase potential growth if properly implemented,” said his statement on the United Kingdom economy.
Foreign Minister Rachel Reeves has turned the growth of the economy into a key priority for the government to help finance future spending plans.
On Tuesday, the chancellor said: “The United Kingdom was the fastest growing economy in the G7 during the first three months of this year and today the IMF has improved our growth forecast.
“We are obtaining results for working people through our change plan, with three new commercial agreements that protect jobs, promote investment and reduce prices, a salary increase for three million workers through the national decent salary and salaries exceed inflation in £ 1,000 during the past year.”
Earlier this month, the Bank of England predicted that the economy of the United Kingdom would grow by 1% in 2025 and 1.25% next year, since it reduced interest rates to 4.25%, its lowest level since May 2023.
The IMF said that the Central Bank should continue to relieve monetary policy gradually, “indicating that expects greater reductions in interest rates.
