The British economy is experiencing a stronger-than-expected growth spurt. As a result, the British are likely to avoid a recession, according to the IMF report. The fund has increased its estimate significantly as households spend more and because of better relations with the European Union.
Lower energy prices in the UK are driving economic growth of 0.4 percent, according to IMF reports. This makes the IMF more positive than last month, when it predicted a rate of 0.3%. If the economy really grew by 0.4 percent, the UK would drop out of last place among the G7 economies with the lowest economic growth, according to the fund. This means that British economic growth is catching up to Germany, among other countries.
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The global economic watchdog has already warned households that interest rates are likely to rise further and remain high to ensure inflation is addressed. British Prime Minister Rishi Sunak’s government is going positively into the battle for the upcoming elections with the hope of faster growth, also because tax cuts are expected.
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The Conservatives are already trailing the opposition Labor Party in opinion polls, due to the high inflation the country is suffering from. The weak growth of the economy, strikes in the public sector and higher taxes also play a role.
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Sunak is trying to restore the government’s economic reputation after the problems caused by the economic plans of former Prime Minister Liz Truss. As a result, the value of the pound fell sharply and bond markets crashed.
