UK Set to Be Second Fastest Growing G7 Economy in 2025

UK

UK: The International Monetary Fund (IMF) has projected that the United Kingdom will be the second fastest growing economy among G7 nations in 2025, outpaced only by the United States. Despite the modest growth rate of 1.3%, the UK is expected to outperform major European peers such as Germany, France, and Italy. The IMF highlights that while the economy shows resilience amid trade tensions, tariff impacts, and geopolitical uncertainty, households are facing significant price pressures, with inflation forecast at 3.4% in 2025 and 2.5% in 2026.

The Fund also cautioned that per capita output growth will remain low, with only 0.4% growth per head in 2025, reflecting the continuing challenges for consumers and businesses. Officials, including Chancellor Rachel Reeves and Bank of England Governor Andrew Bailey, have acknowledged the economic pressures and emphasized policies to maintain financial stability, address rising living costs, and support investment confidence. The IMF further noted that while US tariffs and global trade uncertainties are affecting investment and consumption, the impact has been less severe than initially anticipated.

Source: BBC