BRITAIN’S fragile economy marginally improved at the end of last year – but Rachel Reeves was warned not to “celebrate”.
Growth figures show estimates for UK growth hit 1.4 per cent for last year which was up by 0.1 per cent on previous forecasts.
The outlook report is provided by the International Monetary Fund and their forecasts for this year and next remain unchanged.
But Britain remained behind the US and Canada in terms of growth projection over the coming two years – despite Labour aiming to deliver the highest sustained growth in the G7.
Business confidence suffered following the government’s first Budget where national insurance was hiked hitting investment and hiring plans.
Chancellor Rachel Reeves said the UK is continues to “defy the forecasts” ahead of heading to meet international leaders and finance bosses at the World Economic Forum in Davos this week.
She saidL “After years of decline, this is the year the country turns a corner. The IMF has upgraded our growth for the third time in a row since April 2025, putting us on course to be the fastest growing European G7 economy this year and next.
“Thanks to the stability we have brought to the economy and the investment we’ve unlocked, we continue to defy the forecasts and ease the cost of living for families by bringing down bills. My message at Davos tomorrow is simple: Britain is the best place in the world to invest.”
But Shadow Chancellor Sir Mel Stride said: “A 0.1% uptick is not a triumph – and the fact Rachel Reeves is celebrating it shows how desperate she has become. The economy is flatlining.
“After £66 billion of tax rises, business confidence has collapsed to record lows, inflation and unemployment are up, and growth is flat.
“Gaslighting the country won’t fix the economy – only a serious plan to lower taxes and control welfare will. That’s what a future Conservative government will do.”
The UK’s growth projection for next year puts it behind only the US and Canada out of its G7 counterparts, the IMF say.
The influential economic body said the UK’s GDP growth was expected to be higher than Japan, Italy and France – and equal with Germany.
The UK economic growth projections for 2026 and 2027 are unchanged from the last report, at 1.3% this year and 1.5% next year.
But global growth meanwhile is projected at 3.3% this year and 3.2% for next year.
But in good news on inflation, the IMF reported it was expected to return to target by the end of 2026 due to a weakening labour market.
The international body said the global economy has remained “remarkably resilient”. They also declared that tech-related investment has contributed to growth but not at the same scale as the US.
