UK growth upgraded but energy prices and rates to bite in 2027

The UK economy is expected to perform better this year than previously forecast, according to the International Monetary Fund. The improved near-term outlook is tempered by a warning that higher energy prices and interest rates will weigh on growth in 2027.

Stronger outlook for this year

The IMF said UK growth is now projected to exceed its earlier expectation for the current year. The updated forecast points to a more positive near-term economic outlook, although the source does not provide a specific growth figure.

Energy and rates expected to weigh in 2027

The organisation expects economic momentum to face greater pressure in 2027. Higher energy prices and interest rates are identified as factors that will reduce growth during that period.

The forecast therefore presents a two-stage outlook for the UK economy: a stronger performance than previously anticipated this year, followed by increased pressure in 2027. The timing of those risks will be important for the wider economic picture, though no further details were provided.