IMF Urges UK to Cut Borrowing as 2026 Growth Forecast Rises to 1%

9 articles · Updated · The Guardian · May 18

The IMF told Britain to keep reducing its budget deficit, warning that market pressure and domestic political uncertainty have left the government with little room to borrow more.
Its annual review still upgraded 2026 growth to 1% from 0.8%, citing strong prewar momentum and a solid first quarter after the economy expanded 0.6%.
Bond investors have grown more nervous as Keir Starmer faces a potential Labour leadership challenge; 30-year gilt yields hit 5.8% last week, the highest since 1998, before easing.
The fund said the UK already faces a roughly £100 billion annual interest bill and that any new cost-of-living support should be targeted, temporary and affordable.
Against the backdrop of the Iran war, the IMF said risks remain tilted downward and argued that policy predictability and political stability would help shore up confidence.

With UK borrowing costs at an 18-year high, is the IMF's optimistic growth forecast ignoring a looming market crisis?

As the Iran war drives up fuel prices, are government handouts a real solution or is a radical energy security overhaul needed?