{"id":683422,"date":"2026-07-10T01:59:31","date_gmt":"2026-07-10T01:59:31","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/683422\/"},"modified":"2026-07-10T01:59:31","modified_gmt":"2026-07-10T01:59:31","slug":"uk-inflation-set-to-ease-back-faster-than-expected-says-imf-2","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/683422\/","title":{"rendered":"UK inflation set to ease back faster than expected, says IMF"},"content":{"rendered":"

UK inflation is set to ease back to target levels quicker than previously expected, according to projections from the International Monetary Fund (IMF).<\/p>\n

It came as the global economic body said the global economic shock from the conflict in the Middle East was \u201cbetter than feared\u201d.<\/p>\n

The IMF\u2019s latest update to its World Economic Outlook indicated that inflation will ease back in the UK over the next year.<\/p>\n

It said that inflation is set to drop back to the target rate of 2% set by the Government and Bank of England by mid-2027.<\/p>\n

In May, the organisation had previously indicated that it would only drop back to the target rate by the end of next year.<\/p>\n

UK consumer price index (CPI) inflation was most recently recorded at 2.8% in May, but is widely expected to increase in the coming months.<\/p>\n

The Bank of England most recently predicted that inflation could pick up to slightly above 3.25% later this year.<\/p>\n

Inflation projections in the UK have been somewhat tempered by a recent interim peace deal between the US and Iran, which has contributed to easing oil prices.<\/p>\n

Nevertheless, the IMF said its global price inflation forecasts for both 2026 and 2027 were still slightly higher than its outlook report in April.<\/p>\n

Global price inflation is set to rise to 4.7% this year from 4.1% last year on the back of higher food and energy prices, the IMF said.<\/p>\n

It predicted that this will then cool to 3.9% next year.<\/p>\n

However, the predictions are still 0.3 percentage points higher for 2026 and 0.2% higher for 2027 compared with its earlier forecasts.<\/p>\n

Meanwhile, the global economy is expected to grow by 3% this year, down slightly from a previous forecast of 3.1%.<\/p>\n

But this is expected to improve to 3.4% in 2027, up from a previous forecast of 3.2%.<\/p>\n

The IMF maintained the predictions for UK economic growth it made in May.<\/p>\n

In its report, the IMF said: \u201cThe global economy as a whole has, so far, weathered the shock from the war better than feared.<\/p>\n

\u201cRisks to the outlook are more balanced than in April but still tilted to the downside.<\/p>\n

\u201cThe possibility of renewed Middle East conflict looms large and could extend commodity price volatility, further threaten supply chains, raise prices, and weigh on financial conditions.\u201d<\/p>\n

The UK economy is set to grow by 1% in 2026, the IMF said.<\/p>\n

This is 0.2 percentage points stronger than the IMF\u2019s previous outlook report in April, but is the same as the UK-focused update published in May.<\/p>\n

Chancellor Rachel Reeves said: \u201cThe UK is the only G7 country where the growth forecast this year has been upgraded by the IMF.<\/p>\n

\u201cThis shows we have the right economic plan to build a stronger and more secure economy.<\/p>\n

\u201cOur choices mean the economy is in a better position to deal with the costs of the war in Iran while kickstarting long-term growth by focusing on our three big choices \u2013 boosting AI, regional growth and strengthening trade with the EU.\u201d<\/p>\n

STV News is now on WhatsApp<\/p>\n

Get all the latest news from around the country<\/p>\n

Follow STV News <\/a>Follow STV News on WhatsApp<\/p>\n

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