The International Monetary Fund (IMF) has revised its growth forecast for the UK economy upward for this year, now projecting a 1.6% growth, up from the previous estimate of 1.5%. However, the IMF has cautioned about the potential consequences of Donald Trump's economic agenda.
The IMF warns that potential tariffs initiated by the incoming US President could exacerbate trade tensions, hamper investments, and disrupt global supply chains. While policies like tariffs, tax cuts, and deregulation might provide a short-term stimulus to the US economy, the IMF cautions that they could have adverse long-term effects.
Regarding the UK economy, the IMF predicts a stronger performance compared to European economies such as Germany, France, and Italy over the next two years. This forecast could be a positive development for Chancellor Rachel Reeves who has been under scrutiny for recent economic trends indicating stagnation.
The IMF’s report also underscores concerns over Trump's trade policies and their potential impact on global growth. Trump's proposed tariffs on imports from various countries and the uncertainty surrounding his economic strategy have already led to market turbulence worldwide, with implications for stock markets and global economic stability.