UK economy set for smaller hit than feared: IMF
Britain now looks set for a shallower economic hit this year than previously thought but remains on course to suffer the sharpest contraction among the world's big economies, the International Monetary Fund said on Tuesday.
British gross domestic product will contract by 0.3 per cent in 2023, the IMF said in its latest set of global forecasts, a smaller shrinkage than the 0.6 per cent contraction the Fund predicted in January.
Britain is no longer the only Group of Seven economy set for a fall in GDP this year as Germany is now expected to shrink by 0.1 per cent, the IMF forecasts showed.
But its contraction this year is set to be the biggest among the Group of 20 economies, according to the IMF's forecasts.
Finance minister Jeremy Hunt found some reasons to cheer the forecast, noting that the upgrade from January was the biggest among the G7 nations. After narrowly avoiding recession in 2022, Britain's economy has shown some signs of resilience in early 2023. The Bank of England says it expects slight growth in the second quarter after a small contraction in the first three months of the year.
Prime Minister Rishi Sunak and Hunt are under pressure to get Britain's economy growing more quickly before an election expected next year but so far they have defied pressure from within their Conservative Party to cut taxes, saying they are focused primarily on lowering inflation.
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