The International Monetary Fund (IMF) has cut its growth forecasts for the UK economy this year from 0.6% to 0.5%.
This followed a mere 0.1% growth over the course of last year and will come as “the lagged negative effects of high energy prices wane”, the IMF explained.
UK Gross domestic product (GDP) will then likely climb by 1.5% next year, “as disinflation allows financial conditions to ease and real incomes to recover”.
The cut sees the UK ranked sixth among G7 nations in terms of forecasted economic growth this year, followed only by Germany.
The US, Spanish and Canadian economies are expected to grow by as much as 2.7%, 1.9% and 1.2% in the meantime, respectively.
UK inflation was forecast to average 2.5% for the rest of 2024, before falling to the Bank of England’s targeted 2% next year.
“The forecast for growth in the medium term is optimistic, but like all our peers, the UK's growth in the short term has been impacted by higher interest rates,” a Treasury spokesperson said.
“Today's report shows we are winning the battle against high inflation, with the IMF forecasting that it will fall much faster than previously expected.”