Faster-growing economy is fillip for Reeves's Budget

The UK economy will grow faster than previously thought as lower inflation and borrowing costs lead to a boost in business activity, a filip for chancellor Rachel Reeves as she aims to fix the nation’s finances.

- HOWARD MUSTOE

The update from the International Monetary Fund also suggested that the fight against inflation and the cost of living crisis had “largely been won”.

The UK will grow 1.1 per cent this year, up from previous estimates of 0.7 per cent. Next year, growth of 1.5 per cent is expected.

“Rachel Reeves is looking for all the good news she can get ahead of the Budget and an upgraded UK economic forecast from the IMF has certainly come at the right time,” says Dan Coatsworth, investment analyst at AJ Bell.

The growth rate looks poor compared to the world’s average of 3.2 per cent, “but something is better than nothing given the uncertain backdrop”, he said.