The UK economy is set to grow more quickly than previously thought in 2025, according to experts.
In a much-needed boost for Rachel Reeves, a report by the International Monetary Fund forecast that the country’s gross domestic product (GDP) will increase by 1.6% over the next 12 months.
Last October, the highly-respected body said it would grow by 1.5%.
According to the IMF, Britain’s GDP will go up by 1.5% in 2026, which would mean the UK is Europe’s fastest-growing economy over the next two years.
However, the IMF also said that the UK economy only grew by 0.9% last year, down from its previous forecast of 1.1%.
The improved future growth prospects will be welcomed in the Treasury following a rocky start to 2025.
Government borrowing costs, and inflation, have both been on the rise, although data in recent days has been more positive for the chancellor.
Keir Starmer was even forced to confirm that Reeves would remain in post for “many many years to come” amid speculation about her future.
Responding to the IMF forecast, the chancellor said: “The UK is forecast to be the fastest growing major European economy over the next two years and the only G7 economy, apart from the US, to have its growth forecast upgraded for this year.
“I will go further and faster in my mission for growth through intelligent investment and relentless reform, and deliver on our promise to improve living standards in every part of the UK through the plan for change.”
Overall, the IMF said that the wider global economy will grow by 3.3% in both 2025 and 2026.
“Global growth is expected to remain stable, albeit lacklustre,” their report said.