IMF warns Trumps tariffs are set to drag down UK economy next year
Independent5 days
IMF Upgrades UK Growth But Warns of Trump Tariff Impact
Above: Rachel Reeves, U.K. Chancellor of the Exchequer, during the International Monetary Fund (IMF) and World Bank Spring meetings at the IMF headquarters in Washington, D.C., on April 24, 2025. Image copyright: Tierney L. Cross/Bloomberg via Getty Images
The Spin
Pro-government narrative
The IMF’s latest review is a vote of confidence in the U.K.’s economic strategy. Upgrading its 2025 growth forecast and backing Labour's fiscal plan as “credible and growth-friendly” shows real progress. Meanwhile, the IMF's fiscal rule recommendations give Rachel Reeves much-needed political cover and further headroom in times of political uncertainty.
Opposition narrative
The IMF may praise the U.K.’s economic strategy on paper, but its warnings are stark: high debt, rising interest payments, and an aging population leave little room for error. The government’s fiscal “credibility” rests on tightrope tactics and shifting goalposts. Without real reform or tough choices, the Labour government risks sleepwalking into a financial crisis.