IMF: Britain to Avoid Recession in 2023
The UK is no longer expected to fall into recession in 2023, thanks to resilient demand and supply, though the outlook is still subdued due to high inflation and the resulting monetary tightening, the International Monetary Fund said Tuesday.
The IMF anticipates a 0.4% economic growth for Britain in 2023, upgraded from its previous estimate of a 0.3% contraction. The revised forecast reflects faster wage growth in relation to inflation, improved government spending and rising confidence following Brexit, further boosted by lower energy prices and normalization in the global supply chains.
With disinflation set to support real incomes, the British economy is projected to expand 1% in 2024. Growth in the UK is then seen averaging 2% by 2025 and 2026, as monetary and financial conditions ease.
In terms of inflation, the IMF expects the annual rate to return to the 2% target only by mid-2025, corresponding to a six-month delay from the staff’s earlier projections. As a result, the financial agency warned that interest rates will likely remain high longer than expected to effectively curb inflation. #IMF: Britain to Avoid Recession in 2023
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