Britain set for minor boost as world economy growth forecast upgraded despite Trump tariffs
Britain is in line for a small boost with the IMF upgrading its growth predictions by just 0.1 per cent for 2025. Growth is expected to sit at 1.2 per cent this year and 1.4 per cent for 2026, the International Monetary Fund's (IMF) latest World Economic Outlook forecasts.
It came as the IMF said the global economy would be more resilient than it expected in May. Global growth is set to be 3 per cent this year and 3.1 per cent next year, up from 2.8 per cent and 3 per cent respectively.
Like Britain, Germany and Italy have both had their growth upgraded by 0.1 per cent for 2025, and received no upgrade for 2026. Meanwhile, Canada was handed a marginally bigger upgrade of 0.2 per cent in 2025 and 0.3 per cent in 2026, taking its growth to 1.6 per cent in 2025 and 1.9 per cent in 2026.
The world growth upgrade reflects what the IMF called front-loading in recent months, with countries rushing to ship goods to the US to get ahead of Mr Trump's tariffs.
This has happened as businesses and households tried to prepare for planned increases to US tariff rates, following Mr Trump's "liberation day" announcements in April, according to the report.
The IMF said front-loading had "shaped economic activity in the first half of the year", adding that it was "creating exposures that could amplify the impact of any potential negative shocks".
For example, firms could end up having too much stock, therefore pushing down future imports, or it could lead to additional holding costs or the risk of items becoming obsolete.
Meanwhile, the growth upgrade since April was also driven by US tariffs being lowered since higher rates were first announced by Mr Trump, alongside improved conditions in the financial markets.
This came after the US struck new trade deals, including with the UK and, most recently, the EU. But the UK's growth rate flatlining while trade deals benefited other economies poses fresh questions for Rachel Reeves.
The chancellor has been accused of stalling growth with her and Sir Keir Starmer 's economic doom and gloom after taking office last July and through October's tax-hiking Budget.
She has a multi-billion pound black hole to fill ahead of this autumn's Budget and is considering a range of potential tax hikes and spending cuts to balance the country's books.
The Conservatives said under Labour 'growth is going nowhere', adding that the IMF report confirms that.
Shadow chancellor Mel Stride said: 'Business confidence has collapsed all because of the chancellor's reckless economic choices.
"You can't tax your way to growth - we need to back British businesses and workers.
"Yet Rachel Reeves looks set to do it all over again in the autumn - yet more taxes, yet more pain for our economy."
But Ms Reeves said the forecast still forecasts the UK to have the highest growth in the G7.
The chancellor said: 'I am determined to unlock Britain's full potential, which is why we are investing billions of pounds through our Plan for Change - in jobs through better city region transport, record funding for affordable homes, as well as backing major projects like Sizewell C to drive economic growth and put more money into people's pockets.'
Countries also benefited via the introduction of some higher tariff rates while others were paused until August, notably between China and the US, helping diffuse escalating trade tensions and open the door to negotiations.
However, the IMF warned that a "rebound in effective tariff rates could lead to weaker growth" and weigh on wider sentiment.
"Elevated uncertainty could start weighing more heavily on activity, also as deadlines for additional tariffs expire without progress on substantial, permanent agreements," the report said.
Furthermore, the IMF flagged conflict in the Middle East creating potential risks to global shipping and trade, which could further raise commodity prices like oil.
On the other hand, the report found that global growth could be lifted if trade negotiations lead to lower tariffs, ease tensions, and create more certainty and predictability.
The IMF also highlighted technological advancements, including the use of artificial intelligence (AI), as a way to further boost growth around the world.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
a few seconds ago
- Daily Mail
PayPal makes major change to payments as app goes after Visa and Mastercard dominance
PayPal users can now pay for goods and services using more than 100 different cryptocurrencies. The new feature, called 'Pay with Crypto', will also allow consumers to use wallets such as Coinbase and MetaMask to complete their purchases. Payments are instantly converted into dollars or stablecoins, shielding merchants from crypto price swings. PayPal says the move will make cross‑border transactions cheaper and faster, cutting into the high fees businesses face with international card payments. Until July 31, the company is offering merchants a 0.99% transaction rate — well below the 1.5 to 3.5 percent average for credit cards, according to NerdWallet. 'Building on our 25 years in payments, we let users link their wallet, pay with any token, convert it instantly and deliver US dollars to merchants in seconds,' PayPal CEO Alex Chriss said in a statement. 'The result? Merchants pay less in fees and can instantly use funds,' he added. Payment providers and retailers are increasingly exploring new ways to process transactions. Retail giants Walmart and Amazon, for example, are reportedly weighing plans to create their own stablecoins — a type of cryptocurrency pegged to the US dollar — in a bid to cut out middlemen like Visa, Mastercard, and big banks. Businesses can opt in to a limited version of the system in the coming weeks and availability will expand later in the year, a spokesperson explained. 'Cryptocurrency promised a more affordable financial system and instant global transfers,' Chriss added. 'But challenges persist: extreme price volatility, complex wallets prone to errors, and irreversible transactions with no easy way to issue refunds. Pay with Crypto helps relieve these challenges.' President Trump has been a supporter of the crypto industry in his second term in office. Last week he signed the GENIUS Act into law, marking the first major crypto legislation passed by congress establishing a regulatory framework. Members of the Trump family have also launched their own 'meme coin' cryptocurrencies. PayPal - which has acquired fintech companies Venmo, Xoom and Honey - was one of the first major players in the online payments industry, but in recent years has faced stiff competition from companies like Apple and Zelle. As a result it has faced brutal job cuts, including slashing nine percent of its workforce last year. The payment provider has also been hit by several successful look alike scams. Other scams send bogus payment or invoice requests using PayPal directly. PayPal allows anyone with an account to send an invoice, and scammers exploit this feature to make their schemes seem legitimate. The number listed in the invoice claims it is the contact for PayPal, but it takes users to a thief who is ready to take their money. Calling the fake support number is the worst thing you can do. The scammer might ask for your login details or payment card information to 'resolve the issue.' In some cases, they'll install malware on your device, stealing passwords and financial details in the background.
BBC News
2 minutes ago
- BBC News
Bowen: UK move to recognise Palestinian state is a diplomatic crowbar to revive peace process
Prime Minister Sir Keir Starmer's announcement that Britain will recognise Palestinian statehood is a major change in UK foreign offered to postpone recognition if Israel took "substantive steps to end the appalling situation in Gaza, agree to a ceasefire and commit to a long-term, sustainable peace, reviving the prospect of a two-state solution."Israel's immediate rejection of his statement meant that Starmer's speech writers can start work now on what he will say at the UN General Assembly in September. UK recognition of Palestine looks "irreversible," according to a senior British won't be expecting Britain's change of policy to produce an independent Palestinian state any time soon – from the perspective of many Israelis, the best time for it would be never – but the intention, diplomatic sources say, is to empower moderates on both sides, Israelis and Palestinians. The British hope they can jolt them into believing that peace might be won't be easy, not just because of the way Hamas killed around 1,200 people, including hundreds of Israeli civilians, and took hostages on 7 October 2023, followed by Israel's vengeful response that has killed tens of thousands civilians and left Gaza in is also because every attempt to make peace has failed. Years of peace talks in the 1990s ended in bloodshed. Every attempt to revive them since then has collapsed. Israel's rejection came minutes after Keir Starmer finished speaking in Downing Street. Later in the evening, Israel's prime minister Benjamin Netanyahu posted a fiercely worded denunciation on social media."Starmer rewards Hamas's monstrous terrorism and punishes its victims. A jihadist state on Israel's border TODAY will threaten Britain TOMORROW.""Appeasement towards jihadist terrorists always fails. It will fail you too. It will not happen."Netanyahu denies Israel has caused starvation and catastrophe in Gaza. Had he accepted Britain's conditions for a postponement, his government would have disintegrated. He depends on the support of ultra nationalist extremists who want to annex the occupied territories and force Palestinians out, not grant them Netanyahu is not their prisoner. He built a career opposing the two-state solution, the idea that peace can be built by creating an independent Palestinian state alongside Israel. Earlier this month he said a Palestinian state would be a 'launchpad' for more 7 October style attempts to destroy will be hoping for the strong backing of the US government. Its position is that recognising a Palestinian state now rewards Hamas Trump told reporters as he flew back to the US after his golfing interlude in Scotland that he didn't support Britain's issue of Palestinian sovereignty could become another factor cracking apart transatlantic the last few weeks Keir Starmer was not convinced the time was right to recognise Palestine. But pictures of Palestinian children in Gaza starving to death were the last straw after so much killing and hardened in Downing Street and the Foreign Office, as well as in the Labour party and more widely in the decision to join France in recognising Palestine is another sign of Israel's increasing diplomatic isolation. Two of its major western allies, the UK and France, both permanent members of the UN Security Council, have dismissed Israel's attempt to block their recognition of Palestine when the General Assembly meets in New York in September. In New York just after Starmer's statement, David Lammy, the UK foreign secretary, was given a big round of applause when he announced Britain's decision at the UN's conference on a two-state solution and recognition of a Palestinian dismissed the accusation that Palestinian independence could be lethal for Israel."There is no contradiction between support for Israel's security and support for Palestinian statehood. Indeed, the opposite is true.""Let me be clear: the Netanyahu government's rejection of a two-state solution is wrong – it's wrong morally and it's wrong strategically."A British official said the atmosphere was electric as Lammy told the delegates that the UK's announcement was being made "with the hand of history on our shoulders." Lammy went on to delve into Britain's imperial past in Palestine which is deeply intertwined with the roots of the conflict between Jews and Arabs for control of the land Britain once captured Jerusalem from the Ottoman Empire in 1917 and controlled Palestine until in 1948, exhausted and out of ideas to deal with what was then a full-scale war between Arabs and Jews, it handed over responsibility to the UN and left Palestine. Immediately, Israel's first prime minister David Ben Gurion declared independence, and Israel defeated an invasion by Arab the UN David Lammy recalled how Arthur Balfour, his predecessor as foreign secretary had in 1917 signed a typewritten letter promising to 'view with favour the establishment in Palestine of a national home for the Jewish people.'But the document, known as the Balfour Declaration, also stated "that nothing shall be done which may prejudice the civil and religious rights of non-Jewish communities in Palestine." It did not use the word Arab, but that is what was said Britain can be proud of the way it helped lay Israel's foundations, But the promise to Palestinians, Lammy said, was not kept, and that "is a historical injustice which continues to unfold."Britain's conflicting promises fuelled and shaped the conflict. A time traveller going back a century to Palestine in the 1920s would find the tension and violence depressingly way the UK hopes to end the misery in Gaza, create peace in the Middle East and remedy the historical injustice Lammy described is to revive the two-state conference in New York at which he was speaking was chaired by France and Saudi Arabia. It has produced a seven-page document aimed at creating a way ahead to revive the two-state solution, which includes condemnation by Arab states of Hamas and its 7 October attacks on window for peace through the two-state solution appeared to be locked shut after the collapse of the peace process that started with real hope in the decision to recognise Palestine is a diplomatic crowbar to try to reopen it.
Reuters
2 minutes ago
- Reuters
Trump administration asks judges to release Epstein, Maxwell grand jury transcripts
NEW YORK, July 30 (Reuters) - Donald Trump's administration urged two judges on Tuesday night to release testimony heard by the grand juries that indicted the late financier Jeffrey Epstein and British socialite Ghislaine Maxwell on sex trafficking charges as the president seeks to calm an uproar over his administration's handling of the matter. The Justice Department first sought court permission on July 18 to make public transcripts of the confidential testimony given by witnesses years ago in the two cases, but Manhattan-based U.S. District Judges Richard Berman and Paul Engelmayer asked the government to flesh out the legal bases for the requests. In a pair of court filings just before midnight, prosecutors said unsealing the materials would be appropriate given the "abundant public interest" in the Epstein case and persistent scrutiny of how it was handled by federal law enforcement. The Epstein case has been at the center of conspiracy theories for years. Trump has faced pressure in recent months to make public documents from the federal investigations into Epstein and Maxwell. Epstein hanged himself in jail in 2019, an autopsy concluded, while awaiting trial on sex trafficking charges brought by federal prosecutors. He had pleaded not guilty. Maxwell, Epstein's longtime girlfriend, was convicted in 2021 on sex trafficking charges and is serving a 20-year prison sentence in Florida. Maxwell had pleaded not guilty and is now asking the U.S. Supreme Court to overturn her conviction. Trump said this month he had asked Attorney General Pam Bondi to seek the release of grand jury transcripts in the two cases. The president did so after the Justice Department said it concluded that Epstein died by suicide and that there was no incriminating list of his clients. The Justice Department's announcement angered some of Trump's conservative supporters who believe the government is covering up Epstein's ties to the rich and powerful and that the financier was murdered in jail. Grand juries are convened by prosecutors and meet in secret to hear witness testimony and decide whether to indict people suspected of crimes. Records of their proceedings usually remain sealed. There are only limited circumstances under which such transcripts can be disclosed. Even if one or both of the judges allow the transcripts to be made public, it is not clear whether the public would learn anything new or noteworthy. Maxwell's four-week trial in 2021 included public testimony from alleged sex trafficking victims, associates of Epstein and Maxwell, and law enforcement officers. The transcripts also would not represent all the previously unreleased material in the government's possession. Investigators and prosecutors may pursue leads that they cannot substantiate or interview potential witnesses whom they do not ultimately call to testify before a grand jury. U.S. District Judge Robin Rosenberg in Florida on July 23 denied the administration's request to unseal records from grand jury investigations in 2005 and 2007 in that state into Epstein. The judge found that the request did not fall into any of the limited exceptions that may allow for the release of such material. Epstein pleaded guilty in 2008 to a prostitution charge brought under Florida law and was given a 13-month sentence in a deal with prosecutors now widely regarded as too lenient. Deputy U.S. Attorney General Todd Blanche, Trump's former personal lawyer, last week met with Maxwell for two days to see if she had any information about others who had committed crimes. Maxwell's lawyer David Markus and Blanche have not provided detailed accounts of their discussions.
