IMF cuts UK growth forecast, adding pressure on finance minister Hunt |
LONDON, 31 january (Reuters) – Big Britain, is the only Group of Seven country to see a cut in its economic growth forecast for 2023 in the International Monetary Fund’s forecasts published on Tuesday, increasing pressure on Finance Minister Jeremy Hunt to deliver on growth. plan.
Britain’s flagship economy is now set to shrink by 0.6% this year, down sharply from the 0.3% growth previously expected in the IMF’s latest forecast in October.
All other G7 economies are forecast to grow this year, mostly at a stronger pace than the IMF forecast three months ago.
IMF, England’s ex Prime Minister Liz said she would be battling a number of factors, including the higher taxes she announced late last year as she tries to restore investor confidence after Truss’ “mini-budget” in September.
The IMF said that Big Britain after Russia’s invasion of Ukraine gas was particularly hard hit by the price hike because it got most of its electricity from gas, and it also faced labor shortages that kept the economy afloat.
A sharp increase in interest rates by the Bank of England to try to eliminate risks from a jump in inflation will also have an impact.
“All these factors together lead to a fairly sharp decline in activity in 2023,” IMF chief economist Pierre-Olivier Gourinchas told reporters.
On the contrary, in the year 2022 of Britain Europe It is expected to record one of the highest growth rates among the countries at 4.1%, Gourinchas said.
Petya Koeva-Brooks, deputy director of the IMF’s research department, of England USA He said that the share of variable interest mortgage loans is higher compared to countries like
“Again, the transmission of monetary policy is faster and faster,” he said.
Britain It is the only economy in the G7 that has failed to recover its pre-pandemic size, with Brexit widely seen as a unique drag among its peers.
Responding to the IMF’s report, Hunt said almost all advanced economies were facing headwinds and past forecasts from a number of institutions, including the IMF, proved too gloomy for Britain’s prospects.
“Short-term challenges should not overshadow our long-term prospects.
Hunt is due to unveil measures he hopes will boost growth in his budget statement on March 15. Judge Several senior members of the Conservative Party want him to cut taxes immediately.
Hunt last week tax signaled that it would stick to growth, but that Brexit would help Britain become a leader in fast-growing sectors such as digital technology and green energy, while labour he said that the reforms in the market will stimulate growth.
For 2024, the IMF forecast Britain’s economy would grow by 0.9%, up 0.3 percentage points from October’s forecast, but the slowest in the G7 along with Japan and Italy.
Reporting by David Lawder in Washington; Writing by William Schomberg; Edited by David Milliken
Our standards: Thomson Reuters Trust Principles.
2023-01-31 06:28:40
Source – reuters
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