By Andrea Shalal and Suban Abdulla
WASHINGTON/LONDON (Reuters) -Britain is set to have the fastest growth among major European economies this year, according to the International Monetary Fund, a boost to finance minister Rachel Reeves who is under pressure over a slowdown since her party came to power in July.
The IMF on Friday raised its forecast for British growth for 2025 by 0.1 percentage points to 1.6%, making it the third-strongest among the Group of Seven advanced economies after the United States and Canada.
The IMF outlook for British gross domestic product growth in 2026 remained at 1.5%, again the third-fastest in the G7 and unchanged from its October estimate.
IMF Chief Economist Pierre-Olivier Gourinchas said the “modest” growth upgrade reflected a net positive impact from Reeves’ first budget on Oct. 30 – as greater public investment would outweigh headwinds created by higher taxes – as well as rising household incomes and Bank of England rate cuts.
The BoE was likely to cut rates around once per quarter in 2025, he added.
Responding to the upgrade for 2025, Reeves said she would “go further and faster” to deliver economic grow