The International Monetary Fund forecasts no improvement in living standards for UK households in 2024, as high inflation continues to impact economic growth. Chancellor Jeremy Hunt remains optimistic about establishing stronger ties with the US and promoting key industries.
The International Monetary Fund (IMF) has forecasted that UK households will experience no improvement in living standards for the second consecutive year in 2024 due to persistent high inflation. Despite projecting a modest 0.5% growth in the UK economy for the year, the growth per capita is expected to remain stagnant. In its World Economic Outlook, the IMF contrasted this with the more robust growth expected in the US and moderate growth in the eurozone.
Challenges include higher interest rates impacting short-term growth in the UK and other European countries. The IMF also projected a global growth rate of 3.2% for 2024, indicating a resilient yet modest economic recovery worldwide.
Concurrently, UK Chancellor of the Exchequer Jeremy Hunt, during his visit to the United States, emphasised that the UK economy is “on the up” despite these challenges. Hunt is focusing on strengthening economic ties with the US and promoting Britain’s financial services and creative industries. He is also addressing key issues in global economic security and support for countries like Ukraine and Israel through international cooperation.
Amidst these developments, the IMF has commended the global economy’s resilience but highlighted risks such as increased conflict in the Middle East which could impact global food and energy prices. Despite this, the IMF noted a declining trend in global inflation and an anticipated easing of interest rates.
Furthermore, in response to global market dynamics, equity markets have paused after a period of significant growth, influenced by factors such as shifts in oil prices and ongoing geopolitical tensions.
Overall, while the UK and global economies show signs of resilience and recovery, inflation and high interest rates remain key challenges, with varying growth forecasts underlining an uncertain economic landscape ahead.
