Skip to content 
Search

Latest Stories

UK to lead European growth in 2025, predicts IMF

Bank of England predicts 1.5 per cent growth in 2025

UK to lead European growth in 2025, predicts IMF

FILE PHOTO: A view of the Bank of England and the financial district, in London, Britain. REUTERS/Mina Kim.

BRITAIN is set to have the fastest growth among major European economies this year, according to the International Monetary Fund, a boost to finance minister Rachel Reeves who is under pressure over a slowdown since her party came to power in July.

The IMF has raised its forecast for British growth for 2025 by 0.1 percentage points to 1.6 per cent, making it the third-strongest among the Group of Seven advanced economies after the US and Canada.


The IMF outlook for British gross domestic product growth in 2026 remained at 1.5 per cent, again the third-fastest in the G7 and unchanged from its October estimate.

IMF chief economist Pierre-Olivier Gourinchas said the "modest" growth upgrade reflected a net positive impact from Reeves' first budget on Oct. 30 - as greater public investment would outweigh headwinds created by higher taxes - as well as rising household incomes and Bank of England rate cuts.

The BoE was likely to cut rates around once per quarter in 2025, he added.

Responding to the upgrade for 2025, Reeves said she would "go further and faster" to deliver economic growth.

The Bank of England forecast growth of 1.5 per cent in 2025, partly reflecting a short-term boost to the economy from a temporary increase in public spending announced by Reeves on Oct. 30.

Rachel Reeves

Last month, the Organisation for Economic Cooperation and Development also raised its forecast for British economic growth to 1.7 per cent from 1.2 per cent previously.

However, Reeves' spending plans are based on forecasts from the government's Office for Budget Responsibility which pencilled in growth of 2 per cent for 2025 and 1.8 per cent for 2026.

British government 30-year borrowing costs hit their highest since 1998 this week - the biggest losers in a global bond selloff driven by concerns about higher inflation and borrowing under the imminent presidency of Donald Trump.

But British bond prices recovered later in the week after weaker-than-expected British and U.S. inflation data and slower-than-expected GDP growth in November, the first month after Reeves set out her budget plan.

Reeves - whose future has been questioned by opposition lawmakers - doubled down on her budget decisions on Friday (17), saying they had been made in the national interest to put public finances back on "a firm footing".

Britain's economy stagnated in the third quarter of 2024, when the prospect of big tax rises in the Labour government's budget hit companies, and the BoE estimates there was zero growth in the final quarter of 2024 too.

(Reuters)

More For You

Court to review teen's sentence in Bhim Kohli case
Bhim Kohli

Court to review teen's sentence in Bhim Kohli case

THE seven-year prison sentence handed to a 15-year-old boy convicted of the manslaughter of 80-year-old Bhim Sen Kohli is to be reviewed under the UK’s Unduly Lenient Sentence (ULS) scheme.

The Attorney General’s Office confirmed on Friday (5) that the teenager’s sentence will now be considered by the Court of Appeal.

Keep ReadingShow less
Mohammed Siraj 'loving the challenge' of leading India's attack

Mohammed Siraj in action. Reuters/Paul Childs

Mohammed Siraj 'loving the challenge' of leading India's attack

MOHAMMED SIRAJ said he "loved the challenge" of leading India's attack in the absence of Jasprit Bumrah after taking a six-wicket haul in the second Test against England at Edgbaston on Friday (4).

There was widespread criticism when India, who lost last week's series opener at Headingley, omitted outstanding spearhead quick Bumrah, the world's top-ranked Test bowler, from their team in Birmingham.

Keep ReadingShow less
Corbyn- Zarah Sultana

Zarah Sultana with Jeremy Corbyn during a protest outside Downing Street demanding the UK government to stop all arms sales to Israel. (Photo: X/@zarahsultana)

X/@zarahsultana

Zarah Sultana leaves Labour, plans new party with Corbyn and independents

FORMER Labour MP Zarah Sultana has announced her resignation from the party and plans to launch a new political party alongside ex-Labour leader Jeremy Corbyn and other independent MPs and activists.

Sultana, who represents Coventry South, lost the Labour whip last year for supporting the removal of the two-child benefit cap.

Keep ReadingShow less
uk home office

The PAC said the Home Office relies on airline passenger records to track departures but has not reviewed this data since 2020. (Photo: iStock)

iStock

MPs say Home Office unaware if foreign workers leave UK after visas expire

THE HOME OFFICE does not know whether foreign workers are leaving the UK or staying on illegally after their visas expire, according to a cross-party group of MPs.

The Public Accounts Committee (PAC), which oversees government spending, said the department has not analysed exit check data since the skilled worker visa was introduced in 2020, the BBC reported.

Keep ReadingShow less
Gill becomes first Asian captain to score double-century in England

Shubman Gill reacts to reaching his double hundred on day two of the second cricket test match against England at Edgbaston cricket ground in Birmingham, central England on July 3, 2025. (Photo by DARREN STAPLES/AFP via Getty Images)

Gill becomes first Asian captain to score double-century in England

SHUBMAN GILL etched his name in cricket history on Thursday (3), becoming the first Indian and Asian captain to score a double-century in a Test match on English soil as he powered India to a commanding position at Edgbaston.

The 25-year-old skipper scored 269 on the second day of the second Test, having shattered multiple records in a masterful innings that has put England to the sword.

Keep ReadingShow less