Sky News came to a halt for a breaking announcement in a huge blow to Chancellor Rachel Reeves. Leah Boleto shared that Britain’s economic prospects have been downgraded more than any other G7 country in the International Monetary Fund’s latest global assessment. The presenter said: “We will start with breaking news. The International Monetary Fund has downgraded Britain’s economic prospects more than any G7 country in it’s latest update on the state of the global economy
“It’s a fresh blow for Rachel Reeves, with the financial institution slashing the UK’s growth forecast from 1.3 per cent to 0.8 per cent. It follows a similar downgrade from the OECD just last month. The IMF says the UK is also set to see higher inflation in the months ahead, with price rises set to average at 3.2 per cent across 2026.”
IMF economic counsellor Pierre-Olivier Gourinchas said: “There are two main reasons for the downgrade.
“The first is the war in the Middle East, but there was also the fact that there was a relatively weak performance in the UK economy for the second half of last year, and the way the numbers are computed, there is then a carry-over.
He added: “The closing of the Strait of Hormuz and serious damage to critical energy facilities in the Middle East has raised the prospect of a major energy crisis, should a durable solution not be found soon.”
Ms Reeves said: “The war in Iran is not our war, but it will come at a cost to the UK. These are not costs I wanted, but they are costs we will have to respond to. I have vowed that my economic approach to this crisis will be both responsive to a changing world and responsible in the national interest, keeping inflation and interest rates in check to protect households and businesses.
“We entered this conflict in a stronger position because of the choices this government took to build economic stability, but there is more to do. That is why we are strengthening Britain’s energy security, backing British industry and protecting households, to build a Britain that is stronger, more resilient, and prepared for the future.”
“Being handed the biggest downgrade in the G7 is a clear verdict on Rachel Reeves‘ choices – and she’s got no one to blame but herself,” Shadow Chancellor Mel Stride said, while Reform UK’s Robert Jenrick claimed the British people are “paying the price for Rachel Reeves’ incompetence”.
