IMF Executive Board Concludes 2025 Article IV Consultation with United Kingdom

July 25, 2025--An economic recovery is underway, with growth projected at 1.2 percent in 2025 before gaining momentum next year.
The authorities' fiscal plans strike a good balance between supporting growth and safeguarding fiscal sustainability. It will be important to stay the course and deliver the planned deficit reduction over the next five years.
The Bank of England (BoE) should continue to ease monetary policy gradually, while remaining flexible in light of elevated uncertainty.

The authorities' Growth Mission covers the right areas to lift productivity. Given the breadth of the agenda, prioritizing and sequencing of structural reforms, along with clear communication, will be key to success.

The economy rebounded in Q1 2025, after weaker growth in the second half of 2024. The growth recovery in the first quarter was mainly driven by business investment. After easing to 1.7 percent in September, headline inflation picked up again in the fall mainly because of waning effects from lower energy prices. Wage growth continued to moderate as the labor market showed signs of easing. Monetary policy has remained restrictive, despite the gradual reduction in Bank Rate, and the stance of fiscal policy was broadly unchanged in FY2024/25 (relative to the previous year).