IMF upgrades UK growth forecast to 1% for 2024

The International Monetary Fund (IMF) upgraded its 2024 UK GDP growth forecast to 1%, a 0.2 percentage point increase from its April projection, in its July World Economic Outlook update. This makes the UK the third fastest-growing economy in the G7, as the IMF revised down expectations for other G7 nations or left them unchanged. The upgrade reflects diminished fears over the economic impact of the Iran war, though the update was finalized before the latest Middle East hostilities. The IMF cited improved consumer confidence and easing inflation as supporting factors. The UK's growth outlook now trails only the US and Canada among G7 peers.

Global Impact

Economically, the UK's upgraded forecast narrows the growth gap with the US and Canada, potentially shifting capital flows toward UK assets and away from weaker G7 economies like Germany and Japan. Politically, the upgrade bolsters the UK government's narrative of economic stability ahead of a general election, though the Iran war risk remains a geopolitical wildcard.