The International Monetary Fund has upgraded its growth forecast for the UK in 2026 in the latest piece of good economic news for the government.
The UK economy is now predicted to grow by 1% this year, up from 0.8%, with the IMF saying the country “remained resilient.”
However, the body said the war in Iran and “domestic uncertainty” continued to present risks for the UK.
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Last month, the IMF forecast that the UK would be hardest hit by the conflict in the Middle East among the world’s most advanced economies.
But the upgraded growth prediction represents the latest piece of good economic news for the UK, coming the week after figures showed the economy grew by a surprising 0.6% in the first quarter of 2026.
This made the UK the fastest growing of the G7 economies in 2026 so far. Japan is yet to report its growth figures but is expected to be lower than the UK.
On the growth upgrade, the IMF said the UK economy had entered the latest global shock with “more momentum than expected”.
Although it predicted higher energy prices would lead to an increase in inflation, the IMF said this would be temporary and the Bank of England should not need to raise interest rates in response.
Reacting to the news on Monday, Chancellor Rachel Reeves said the figures were “proof” that the government has the “right economic plan”.
“The choices I have made as chancellor mean our economy is in a stronger position as we deal with the costs of the war in Iran,” she said.