UK growth rises but faces headwinds in 2027

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The International Monetary Fund has raised its forecast for British economic growth this year to 1.3 percent, up from its July prediction of 1 percent. This upgrade reflects how well the UK economy has weathered recent global shocks, particularly the energy price disruptions following the US-Iran conflict. However, the IMF warns that higher energy costs and rising interest rates will slow growth to 1.2 percent in 2027, as households and businesses reduce spending and investment in response to these pressures.