United Kingdom: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for United Kingdom

IMF Staff Country Reports, July 8, 2024

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Canonical URL: United Kingdom: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for United Kingdom

The UK economy is approaching a soft landing following a mild technical recession in 2023.
Growth projections:
- 0.7 percent growth in 2024.
- 1.5 percent growth in 2025.
Inflation dynamics:
- Inflation has fallen rapidly from double digit levels last year amid easing energy prices and tight policies.
- Assuming wage and services inflation continue to moderate from their current elevated levels, inflation should return durably to target in the first half of 2025.

Overarching policy objective:
- Maintain price and financial stability.
- Durably lift per capita growth.
- Address pressing public spending needs while credibly stabilizing debt.
Monetary and financial policy:
- Macroprudential settings are appropriate.
- Continued close monitoring of credit conditions and financial stability risks is merited.
- Use stringent stress tests in future calibrations of macroprudential policy.
Structural and strategic policy:
- IMF supports a redoubling of policy efforts to credibly achieve the UK green transition targets.
- Maintain a cautious approach toward industrial policy interventions.

Emphasis on:
- Close monitoring of credit conditions.
- Vigilance toward financial stability risks.
- Incorporation of stringent stress testing into supervisory frameworks and policy calibrations.

United Kingdom: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for United Kingdom