IMF Cuts UK Growth Forecast to 1.1%, Warns Against Blame on Trump

The International Monetary Fund (IMF) has significantly downgraded the UK's economic growth forecast, warning that Chancellor Rachel Reeves cannot attribute Britain's faltering economy primarily to Donald Trump's global trade policies. Instead, the IMF emphasized that domestic factors—including higher government borrowing, increased employer National Insurance Contributions, and rising regulated prices such as energy and water bills—are the main drivers behind the UK's sluggish growth and persistent inflation, which is now the highest among G7 countries. The IMF's chief economist noted that while international tariffs and uncertainty do weigh on growth, UK-specific policies and cost pressures are the primary causes of the economic downturn. Business surveys reported a sharp contraction in April, attributing increased cost burdens and aggressive job cuts to the government's fiscal decisions, including tax hikes and a rise in the National Living Wage. The IMF further warned that these domestic policies are stifling growth, pushing up the cost of living, and leaving the UK vulnerable to external shocks, with GDP per capita expected to stagnate. Opposition voices have criticized the Labour government's high-tax, high-spend approach, arguing it undermines economic confidence and stability.