UK Economic Growth Surges Amid Political Pressure

The IMF's forecast for Britain's economic growth in 2025 provides a boost for finance minister Rachel Reeves amid political pressure. While GDP growth expectations rise, challenges remain with borrowing costs at a multi-decade high. Reeves asserts her budget plans aim to stabilize the national economy.

Britain is poised for the fastest growth among major European economies this year, according to the International Monetary Fund (IMF). This projection provides a significant boost to finance minister Rachel Reeves, who has faced scrutiny over the economic slowdown since her party assumed power in July.

In an unexpected positive revision, the IMF has increased its 2025 UK growth projection by 0.1 percentage points to 1.6%, positioning the UK as the third-strongest economy in the Group of Seven (G7) nations. This is attributed to an anticipated short-term economic resurgence, partly from increased public spending announced by Reeves.

Despite positive growth figures, UK long-term borrowing costs saw a historic high amid global inflation and borrowing concerns, although they later eased with lower inflation data. Reeves remains steadfast in her budgetary decisions, aiming to secure the country's financial stability amidst challenging economic signals.

(With inputs from agencies.)