Reeves’ growth forecast slashed with Trump tariffs hitting UK harder than EU

Independent UK - 22/04
The downgrade to Britain’s growth forecasts heightens the importance of Rachel Reeves securing a trade deal for the UK

The UK’s economic growth forecast has been slashed by the International Monetary Fund (IMF), with a warning that the fallout from Donald Trump’s trade war will hit Britain harder than the rest of Europe.

The global economic organisation predicts growth will stall by 0.5 per cent in 2025, with a further downgrade of 0.1 per cent in 2026. It means the UK economy will grow by just 1.1 per cent next year, and 1.4 per cent the year after.

Rising government borrowing costs as a result of Trump’s tariffs as well as higher inflation and sky-high energy costs in the wake of Russia’s invasion of Ukraine are all to blame, the IMF said.

open image in gallery
The downgrade raises the prospect of further tax hikes or spending cuts in the chancellor’s autumn Budget (PA Wire)

The downgrade threatens to wipe out the fiscal headroom Chancellor Rachel Reeves clawed back with sweeping benefits cuts in her spring statement, meaning she will likely have to make further cuts or hike taxes when she delivers her second Budget this autumn.

The brutal downgrade, more severe than the 0.2 per cent faced by Europe, comes as...
[Short citation of 8% of the original article]