The International Monetary Fund (IMF) upgrades its July growth outlook for the UK, projecting gross domestic product (GDP) growth of 1% in 2026, according to a World Economic Outlook update finalised before the latest outbreak of hostilities in the Middle East. The forecast represents an increase of 0.2 percentage points from the IMF’s April estimate. Several reports say the revision comes as expectations shift toward a smaller-than-feared economic impact from the Iran war.
While the IMF improves its UK outlook, it leaves growth projections for other G7 economies weaker or unchanged, with the UK described as receiving one of the largest upgrades among the group. Other coverage also links the change to expectations that UK inflation may fall faster than previously predicted, aided by the view that disruption risks associated with the Iran conflict are not as severe. Some outlets note that new attacks in the region continue to affect cost-of-living concerns, but the IMF update itself is based on information available before the most recent escalation.
Overall, the IMF’s new baseline points to stronger UK growth relative to earlier forecasts, alongside cooling inflation expectations.
