IMF declares UK’s 2023 recession risk averted

TL;DR Breakdown

  • The International Monetary Fund (IMF) has revised its forecast for the UK economy, now predicting a growth of 0.4% in 2023, effectively averting a projected recession.
  • The IMF attributes this turnaround to measures taken by the UK government to stabilize the economy, tackle inflation, and promote wage growth and business confidence.

The International Monetary Fund (IMF) has released a revised economic forecast for the United Kingdom, stating that the earlier projected recession for 2023 has been successfully avoided.

The IMF attributes this positive shift to effective measures taken by the UK government in stabilizing the economy and combating inflation. However, the organization advises caution, urging the government to resist pre-election tax cuts.

UK’s elevation from recession

The IMF had previously expected the UK economy to shrink by 0.3% in 2023, the weakest projection among all major economies. The new forecast, however, places the UK’s GDP growth at 0.4% for the year, surpassing certain affluent economies, including Germany.

This change, the IMF suggests, is primarily due to a robust rebound in demand fueled by quicker-than-expected wage growth, increased governmental spending, and improved business sentiment.

Further aiding the economic recovery, according to the IMF, were factors such as the decline in energy expenses following sharp increases last year and the regularization of global supply chains.

“UK authorities have exhibited responsible and decisive leadership in recent months, prioritizing, as they should, the fight against inflation,” commented IMF Managing Director Kristalina Georgieva at a recent press briefing.

The IMF commends the current government, under Prime Minister Rishi Sunak and Finance Minister Jeremy Hunt, for prioritizing fiscal prudence.

It urges Hunt to resist the temptation to lessen the tax burden for short-term political gain, arguing that while tax reductions may stimulate investment, they must be implemented when economically feasible.

“The present moment is neither affordable nor desirable for tax cuts,” warned Georgieva, acknowledging the possible pressure from the Conservative Party, currently trailing the Labour Party in opinion polls, to implement tax cuts ahead of the 2024 elections.

Forecasting the future

The IMF anticipates that UK inflation, which soared to more than 10% in March, will decrease to approximately 5% by year-end, aligning with the Bank of England’s previous forecasts.

It is projected to return to its 2% target by mid-2025. The UK economy is also expected to maintain steady growth, with a 1% rise in 2024 and 2% increases in the next two years, eventually settling into a long-term growth rate of about 1.5%.

The IMF additionally emphasized the potential for enhancing Britain’s economic growth through strategies to manage the impact of chronic illnesses on the workforce and minimize policy and regulatory uncertainty to promote business investments.

Despite the overall positive outlook, the IMF did caution against sustained inflation and possible uncontrollable wage increases, labeling these as major immediate risks to the UK’s economic prognosis.

The IMF advised the Bank of England to ensure that monetary policy remains stringent to counter these threats.

“The persisting uncertainty around the macroeconomic climate and the durability of inflation necessitates the ongoing examination of the rate and extent of monetary tightening,” the IMF noted.

In response to these warnings, the Bank of England has systematically increased borrowing costs in 12 consecutive meetings, taking rates to 4.5% this month, with financial markets predicting a peak at 5% later this year.

Overall, the IMF’s reassessment brings welcome relief to the UK, signaling a reversal from recession to growth in the national economy.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

文章来源于互联网:IMF declares UK’s 2023 recession risk averted

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年5月25日 08:04
Next 2023年5月25日 10:19

Related articles

  • Wirex debit cards to witness interruptions soon

    TL;DR Breakdown Wirex debit cards suffer interruptions as a result of license revocation. The company says it is making efforts to resolve the issue. Description Wirex, a prominent multi-currency crypto payment app that offers fiat on-ramps, off-ramps, and debit cards, has notified some of its customers in an email that their debit cards may cease to function in the European Economic Area (EEA). The potential disruption arises from the Lithuanian central bank’s decision to revoke the license of UAB PayrNet, … Read more Wirex, a prominent multi-currency crypto payment app that offers fiat on-ramps, off-ramps, and debit cards, has notified some of its customers in an email that their debit cards may cease to function in the European Economic Area (EEA). The potential disruption arises from the Lithuanian central bank’s decision to revoke the license of UAB PayrNet, Wirex’s card provider. This development follows a similar announcement from Wirex’s competitor, Cryptopay, regarding potential card service interruptions in the region due to the same issue. Wirex to temporarily halt its debit card services The email sent to Wirex customers explained that…

    Article 2023年6月27日
  • Top crypto tweets of the day – August 15th

    Description Contents hide 1 The sales volume of Bitcoin Ordinals went plunged to almost zero 2 Sam Bankman-Fried is heading to a Brooklyn jail notorious for poor conditions 3 SkyBridge tells SEC the time is long overdue for a spot Bitcoin ETF 4 Robert Kiyosaki predicts Bitcoin could reach 100k 5 DOJ submits new complaints against … Read more Contents hide 1 The sales volume of Bitcoin Ordinals went plunged to almost zero 2 Sam Bankman-Fried is heading to a Brooklyn jail notorious for poor conditions 3 SkyBridge tells SEC the time is long overdue for a spot Bitcoin ETF 4 Robert Kiyosaki predicts Bitcoin could reach 100k 5 DOJ submits new complaints against Sam Bankman-Fried 6 Bitcoin makes a new ATH in Argentina 7 $779 billion asset manager AB Bernstein says the approval odds for a spot Bitcoin ETF have risen 8 The Monetary Authority of Singapore (MAS) has announced a new regulatory framework for stablecoin 9 The next (7) deadlines for spot Bitcoin ETFs are all in the first week of September 10 BTC correlation with U.S. equities…

    Article 2023年8月15日
  • Ex-First Republic CEO points to banking contagion as cause of collapse

    TL;DR Breakdown Former First Republic Bank CEO Michael Roffler attributed the bank’s collapse to contagion effects from the failures of other regional banks, particularly Silicon Valley Bank and Signature Bank. Despite the regular review of First Republic’s financial position by the DFPI and the FDIC, the bank suffered from substantial deposit outflows, leading to its failure. After the bank’s shutdown by California banking regulators, its assets were sold to JPMorgan Chase & Co in the largest U.S. bank failure since the 2008 financial crisis. In an unexpected turn of events, the former CEO of First Republic Bank, Michael Roffler, attributed the bank’s unprecedented downfall to the ripple effects of the collapse of other regional banks. Testifying before the Senate Banking Committee on Wednesday, Roffler painted a picture of a financial institution caught in an industry-wide panic, leading to a staggering withdrawal of over $100 billion deposits within a few weeks. Roffler stated, “The unforeseen failures of Silicon Valley Bank and Signature Bank were the catalysts that instigated substantial deposit outflows from our bank.” The impact of these collapses, which was…

    Article 2023年5月18日
  • Egypt officially applies to be a part of the BRICS

    TL;DR Breakdown Egypt officially applies to join the BRICS (Brazil, Russia, India, China, and South Africa) bloc. The move represents the country’s interest in developing trade and shifting to alternative currencies. The country has previously participated in “friends of BRICS” discussions. If accepted, Egypt’s BRICS membership could potentially alter the global reserve status of the U.S. dollar. Elevating its economic status on the world stage, Egypt has formally expressed its intention to be incorporated into the BRICS alliance. The application symbolizes the nation’s vision to foster its trade relationships and shift towards alternative currencies, a key initiative currently endorsed by the BRICS nations. Sailing Towards Alternate Financial Channels The BRICS partnership, an acronym for Brazil, Russia, India, China, and South Africa, has caught the attention of Egypt owing to its endeavor to maximize the transition of trade to substitute currencies. This could include the creation of a joint currency among member nations, a proposal that the country finds particularly appealing. Georgy Borisenko, Russia’s ambassador to Egypt, confirmed Egypt’s application in a statement to TASS, the Russian state news agency. Highlighting…

    Article 2023年6月17日
  • Federal Reserve’s Barr sounds alarm on stablecoin oversight needs

    TL;DR Breakdown Federal Reserve Vice Chair Michael Barr warns about the risks of unregulated stablecoins, emphasizing the need for strong federal oversight. The House Financial Services Committee is divided on stablecoin regulation. Barr clarified that the Federal Reserve is still in the research phase regarding issuing a CBDC and has made no decisions yet. Description Federal Reserve Vice Chair of Supervision Michael Barr raised alarms about stablecoins in a fintech conference on Friday. He emphasized the urgent need for strong federal oversight. Barr warned that non-regulated stablecoins could risk financial stability and monetary policy. This message comes as House Financial Services Committee lawmakers spar over stablecoin regulation. Last month, the … Read more Federal Reserve Vice Chair of Supervision Michael Barr raised alarms about stablecoins in a fintech conference on Friday. He emphasized the urgent need for strong federal oversight. Barr warned that non-regulated stablecoins could risk financial stability and monetary policy. This message comes as House Financial Services Committee lawmakers spar over stablecoin regulation. Last month, the central bank introduced new rules for overseeing banks involved in stablecoin activities….

    Article 2023年9月9日
TOP