Growth next year will be weighed down by global trade tensions, including less activity among the UK’s trading partners, the impact of US President Donald Trump’s tariffs and “persistent uncertainty”, the IMF’s report said.
The combination of these factors will reduce next year’s growth to the tune of 0.3% by 2026, it said.
But the IMF pointed to trade agreements the UK has struck with countries like EU, India and the US, saying they demonstrated the government’s commitment to “establishing a more predictable environment for UK exporters”.
Chancellor Reeves welcomed the report, saying that the government’s trade deals were “protecting jobs, boosting investment and cutting prices”.
But Mel Stride, shadow chancellor, said Reeves had “already fiddled her fiscal targets to allow her to borrow hundreds of billions more over this parliament”.
“In a context where the Chancellor’s credibility is already in tatters, changing the goalposts a second time would run real risks with market confidence,” he added.