IMF: UK growth forecast downgraded

UK economic growth is expected to be weaker than forecast this year, the International Monetary Fund has predicted.

The IMF downgraded the UK’s projected growth from its April estimate of two per cent to 1.7 per cent, while the figure for 2018 remains at 1.5 per cent.

Its update to the World Economic Outlook said the revision was a result of the “weaker-than-expected activity” in the first quarter.

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The US also had its forecast growth revised down, while several eurozone economies had “stronger momentum” in the first part of 2017 than expected.

The IMF identified the UK’s negotiations on Brexit as one of the “downside risks” that could affect global growth in the future.

“Policy uncertainty remains at a high level and could well rise further, reflecting – for example – difficult-to-predict U.S. regulatory and fiscal policies, negotiations of post-Brexit arrangements, or geopolitical risks. This could harm confidence, deter private investment, and weaken growth.”

A Treasury spokesperson responded: “This forecast underscores exactly why our plans to increase productivity and ensure we get the very best deal with the EU, are vitally important.

“Employment is at a record high and the deficit is down by three quarters, showing that the fundamentals of our economy are strong.

“We will continue to deliver greater prosperity and higher living standards for hard working people across the country.”