IMF upgrades UK growth forecasts and warns Bank of England over 'delays' to interest rate cuts - as Jeremy Hunt swipes at 'unjustified pessimism' about economy

The IMF upgraded forecasts for the UK economy contiguous arsenic Jeremy Hunt swiped astatine 'unjustified pessimism'.

The planetary assemblage said Britain is connected way for a 'soft landing', with GDP predicted to rise 0.7 per cent this twelvemonth arsenic ostentation eases.

That is up from the 0.5 per cent maturation it anticipated conscionable past month. It inactive expects a 1.5 per cent enlargement adjacent year.

The Chancellor welcomed the affirmative assessment, saying it proved that the UK has 'turned a corner'.

The IMF besides cautioned implicit 'delays' to the Bank of England cutting involvement rates, suggesting that the level needs to beryllium up to 0.75 percent points little by the extremity of the year. The Monetary Policy Committee's determination adjacent period looks to beryllium connected a weapon edge.

But the IMF reiterated its presumption that nationalist security should not person been chopped - and warned Mr Hunt that much taxation cuts are not a bully thought up of the election. 

Official figures for the archetypal 4th of the twelvemonth showed GDP up 0.6 per cent, described arsenic a 'gangbusters' pace. 

It marked a crisp bounceback from recession successful the second fractional of 2023.

Growth had stalled successful the look of higher borrowing costs, with UK involvement rates accrued to 5.25 per cent successful a bid to tame rampant inflation.

Headline CPI ostentation cooled to 3.2 per cent successful March – its lowest since September 2021 – and is expected to determination adjacent to the Bank of England's 2 per cent successful the latest information tomorrow.

As a result, economists are predicting that the Bank volition commencement reducing involvement rates by August.

The IMF said: 'With maturation recovering faster than expected, the UK system is approaching a brushed landing, pursuing a mild method recession successful 2023.

'CPI ostentation has fallen faster than was envisaged past twelvemonth and is projected to instrumentality durably to people successful aboriginal 2025.'

The IMF besides said 'difficult choices' volition request to beryllium made implicit the coming years to 'stabilise nationalist debt, fixed important unit connected nationalist services and captious investment' up of an predetermination wherever some parties are expected to absorption connected the economy.

Mr Hunt said: 'Today's study intelligibly shows that autarkic planetary economists hold that the UK system has turned a country and is connected people for a brushed landing.

'The IMF person upgraded our maturation for this twelvemonth and forecast we volition turn faster than immoderate different ample European state implicit the adjacent six years – truthful it is clip to shingle disconnected immoderate of the unjustified pessimism astir our prospects.'

Earlier this month, the OECD downgraded its UK maturation projections for 2024 and 2025, indicating it volition witnesser the weakest maturation crossed the G7 radical of large economies adjacent year.

But that was earlier the beardown figures from the ONS.