IMF slashes UK’s growth forecast, points to U.S. tariffs and borrowing costs

The International Monetary Fund degraded the 2025 United Kingdom growth forecast in its last economic perspective published on Tuesday, warning that the commercial rates of the president of the United States, Donald Trump, the highest cost of indebtedness and the increase in energy prices will be crowded in the year.

In its reference forecast, the IMF predicted that the British economy will grow 1.1%, in 0.5 percentage points of its previous prognosis issued in January. The fund now also expects the United Kingdom to grow 1.4% in 2026, 0.1 percentage points lower than its previous estimate.

The figures were part of the IMF’s reference perspective, which does not include the tariffs made after April 4, such as the 90 -day pause about the highest tasks announced Trump Initiax.

The reduction for 2025 “reflects a smaller transfer of 2024, the impact of recent tariff ads, an increase in golden yields and Waker’s private consumption in the midst of greater inflation as a result of regulated prices and people out of energy.

The reduction pours more cold water into the Labor Government of the United Kingdom, which has made a main priority of the growth of the economy and is every time it is confirmed with the uncertainty posed by the commercial tariffs of one of its largest commercial partners, the USS, the USS

Trump announced a 10% base rate on the imports of the United Kingdom to the US on April 2, despite the fact that Great Britain and the United States have an almost balanced trade when it comes to the exchange of goods.

Although the United Kingdom is hope that it may reach a commercial agreement with the US, the mercurial position of the White House leader on trade and tariffs has taken into account financial institutes.

The last IMF reduction for Great Britain echoes a similar recession in national forecasts. In February, the Bank of England reduced in half the growth projection of the United Kingdom by 2025 from 1.5% to 0.75%, warning of an uncertain global economic perspective and acute inflation at the end of this year of energy and water invoices.

The United Kingdom office for budgetary responsibility in March also reduced its growth forecast for the United Kingdom, reducing its perspective from 2% to 1% growth in 2025.

Despite the recent sales, the economy of the United Kingdom has shown some signs of life recently. The latest monthly growth data published in early April, the economy grew for 0.5% more expected of 0.5% month by month in February, from zero growth in January. National inflation, meanwhile, cooled to a 2.6% expected expected minor in March.

The Bank of England seems optimistic in interest rate cuts, since it seems to balance the growth of the increase with its increase provided in the inflation rate. Economists widely expect the BOE to reduce its key interest rate from 4.5% to 4.25% at its next monetary policy meeting in May.

Looking at the continental neighbors of the United Kingdom in the euro zone, the IMF predicted a slight decrease in the production of 2025, predicting that the growth in the GDP of the euro area will reach 0.8% in 2025, before modestly collecting 1.2% in 2026.

“The growing uncertainty and tariffs are key promoters of moderate growth in 2025,” the bottom said. He pointed out that the compensatory forces that support the modest increase in 2026 include a stronger consumption thoroughly the increase in real wages, together with a fiscal Asing projected in Germany after the important changes in its fiscal rule, knows as the “debt brake.”

The IMF pointed to Spain as a brilliant point in the euro zone, stating that its growth impulse “contrasts with the dynamic slow dynamic”, with the Mediterranean nation expanding its economy by 2.5% this year follows the review of Ravard de Foblower or 0.2 January.

“This reflects a great drag of the most anticipated effects in 2024 and the reconstruction activity after flooding,” said the IMF.

However, Trump’s tariffs throw a shadow on the widest EU. The president of the United States initially imposed a “reciprocal” rate of 20% in all goods from the European Union, but stopped the measures for 90 days until the beginning of July, which reduces the duty to 10% until that moment.

As it seeks to sign its own agreement with the states in the interim, the EU stopped its duty of retaliation aimed at 21 billion euros ($ 24.1 billion) of US goods “to allow time and space for the negotiations of the United EU-United States,” said the European Commission.