All Hail the Latest IMF Forecasts…

The latest IMF forecasts, showing Britain to be the only major economy facing a shrink in GDP next year, no doubt proves a major headache for the government. Somehow Britain falls behind even Russia, a country facing major economic sanctions from almost every single major economy. The IMF largely attributes this diagnosis to high taxes, despite condemning Liz Truss last year for attempting to cut taxes and go for growth. Ever get the feeling the UK can’t win?

Naturally the projections from the IMF are being treated as if God personally inscribed them on a stone tablet and handed them down from on high. The IMF is at least consistent in getting predictions about the UK economy wrong…

  • 2016
    • Apr – 0.3% off
    • Oct – 0.4% off
  • 2017
    • Apr – 0.4% off
    • Oct – 0.7% off
  • 2018
    • Apr – 0.1% off
    • Oct – 0.3% off
  • 2019
    • Apr – 0.4% off
    • Oct – 0.4% off
  • 2021
    • Jan – 3% off
    • Apr – 2.2% off
    • Jul – 0.5% off
    • Oct – 0.7% off
  • 2022
    • Apr – 0.4% off
    • Jul – 0.9% off
    • Oct – 0.5% off

Since 2016 the IMF has consistently underestimated UK GDP growth. Every single year. During an urgent question debate on the forecasts this afternoon, Michael Fabricant asked Treasury Minister James Cartlidge how many of the IMF’s recent predictions about the UK economy turned out to be inaccurate. Ask and you shall receive, Michael…

mdi-timer 31 January 2023 @ 14:40 31 Jan 2023 @ 14:40 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
IMF: UK to Be Only Major Economy to Shrink This Year

New figures from the International Monetary Fund forecast that the UK economy is now expected to contract by 0.6% this year, having previously forecast slight growth of 0.5%. That’s the only contraction expected of all major and advanced economies – including Russia. The IMF cites energy prices, interest rate hikes, business borrowing costs and… taxes rises as the main factors for slowdown.

The ‘good’ news is the IMF has upped its forecast for 2024, now predicting 0.9% growth from 0.6%. It is also worth bearing in mind the IMF’s analysis isn’t gospel; it underestimated 2021’s growth by 2 points. Chancellor Jeremy Hunt is doing his best to remind everyone of that:

“Short-term challenges should not obscure our long-term prospects — the U.K. outperformed many forecasts last year.”

He’s up in front of the 1922 Committee at 4:30pm this afternoon. Best of luck…

mdi-timer 31 January 2023 @ 08:32 31 Jan 2023 @ 08:32 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
IMF: UK Set for 0.5% Growth Next Year

The IMF has released its latest “gloomy and more uncertain” World Economic Outlook Update, and once again it’s slashed its growth figures for the advanced economies next year. Britain comes bottom of the table for the G7 – again – and now it’s forecast to hit 0.5% growth in 2023. The IMF has been wrong before: it underestimated last year’s growth by 2 points. This could be wide of the mark. Balancing the books is looking immediately less important than making a dash for growth… 

mdi-timer 26 July 2022 @ 14:17 26 Jul 2022 @ 14:17 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
UK Growth Forecast to Be Slowest In G7 Next Year

Gloomy figures from the International Monetary Fund (IMF) this afternoon, showing the UK is forecast to be the slowest growing economy in the G7 next year at 1.2%. Worldwide forecasts have also been downgraded following the “severe setback” of the war in Ukraine, with global economic growth estimated at 3.6% for both 2022 and 2023. The IMF underestimated last year’s growth by 2 points when it was forecasting, so this should not be taken as gospel. Inflation is also expected to stay sky high, with the UK projected to experience the highest levels in the G7…

mdi-timer 19 April 2022 @ 15:00 19 Apr 2022 @ 15:00 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
UK Still On Track to Be Fastest Growing Advanced Economy in 2021

New forecasts from the IMF shows that the UK is still expected to be the fastest growing advanced economy for 2021 at a rate of 6.8%, above the global growth projection of 5.9% and comfortably ahead of the US, France, Germany, Japan and Canada. Welcome news, although this is still a 0.2% cut to their earlier forecast back in July. 

The IMF’s paper says that the effectiveness of the UK’s vaccine rollout is, in large part, responsible for maintaining the UK’s growth – and adds that “great vaccine divide” between high and low income countries poses a serious risk:

“The case of the United Kingdom is instructive in the effectiveness of large-scale vaccination campaigns, even against highly contagious variants.”

“The foremost policy priority is therefore to vaccinate at least 40% of the population in every country by the end of 2021 and 70% by mid-2022.”

The report adds thatwidespread vaccinations can also have powerful, positive economic effects, bolstering the recovery.” When you get the call, get the jab…

mdi-timer 12 October 2021 @ 15:19 12 Oct 2021 @ 15:19 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
IMF: Brexit Britain to Grow Faster than Eurozone Post Pandemic

The International Monetary Fund’s new growth projection shows a global contraction of 4.9%, with every region of the world simultaneously in recession for the first time in human history. Advanced economies are projected to be hit particularly harshly by this crisis, with double digit contractions for the UK and Euro area this year at -10.2% each. Notably, however, is that in 2021 (after the UK will have left the economic orbit of the EU) the UK is set to fall by as much, then grow back faster than the cumulative Euro area.

Of course the projected 2021 growth will not make up for the 2020 recession. All advanced European countries’ economies are set to be smaller at the end of 2021 than they were at the end of 2019.  If we can believe IMF forecasting, individually over 2020 and 2021, Germany’s economy will have shrunk by 2.8%, the UK by 4.5%, France by 6.1%, and Italy and Spain both by 7.3%…

mdi-timer 25 June 2020 @ 08:29 25 Jun 2020 @ 08:29 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
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