UK’s economy to be the fastest-growing in Europe for 2 years

It seems the UK is on the up in terms of economic growth: the International Monetary Fund, or IMF, has predicted some strong economic growth in light of softened US tariffs, and the news bodes well for the UK – growth is predicted to be 1.2 per cent this year, and 1.4 per cent in 2026. According to the IMF, the UK will be the third fastest-growing economy in 2025 and 2026, closely trailing the US and Canada.

The IMF is an international financial organisation of the United Nations that aims to achieve sustainable growth for the 191 countries that form part of it. Their prediction represents more positive numbers than the IMF had previously forecast in April of this year, and that is largely due to the easing of the tariffs on US goods. In their new predictions, the IMF also included so-called “front-loading,” or a rush of imports into the US, which have been on the rise in the past few months.

But not only the UK will see a prosperous year, according to the numbers; the IMF also forecast a global economic growth of 3 per cent this year and 3.1 per cent in 2026, which are also significantly more positive than April’s calculations (2.8 per cent and 3 per cent, respectively).

According to the IMF, the global pace of price rises will also fall 4.2 per cent in 2025 and 3.6 per cent in 2026.

But, better doesn’t necessarily mean best …

The numbers are certainly positive compared to recent downturns in the global economic sphere, but they are far from the most productive, especially on a global historic scale. Back in January, the IMF had predicted a 3.3 per cent global growth rate for both 2025 and 2025, and the pre-pandemic historical average was 3.7 per cent. Additionally, even though global price rises are expected to stymie, inflation will probably remain above the ideal.

The IMF has shown hesitancy with regards to the tariffs imposed by the US. Higher tariffs could lead to uncertainty, weaker growth, and overall slower economic activity. Said Pierre-Olivier Gourinchas, the IMF’s chief economist: “The world economy is still hurting, and it’s going to continue hurting with tariffs at that level, even though it’s not as bad as it could have been.”

It’s necessary to note that the IMF has not included the steeper tariffs on products including cars, steel and other metals, pharmaceuticals and computer chips, and also trade deals between Japan and the EU in their numbers.

Gourinchas also warned that the boost from the front-loading will fade away in the second half of the year and into next year. “We’ll have to see whether these deals are sticking, whether they’re unravelled, whether they’re followed by other changes in trade policy,” he said.