Monday 18 May 2026

Chancellor responds to embargoed IMF Article IV report

Chancellor of the Exchequer, Rachel Reeves:

“The IMF upgrading its growth forecasts and backing our fiscal strategy is yet more proof that this 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. Putting our stability at risk when signs of progress are emerging would leave families and businesses worse off.

“Instead, this Government is getting on with the job of building an economy that is stronger, more resilient, and prepared for the future.”

Contact Information

HMT Press Office
020 7270 5238
pressoffice@hmtreasury.gov.uk

Notes to editors

Conclusions for the IMF’s report:

The IMF welcomes the government’s ‘prudent approach’ to fiscal measures in response to the energy crisis and says that our fiscal strategy strikes ‘a good balance between deficit reduction and growth-friendly spending.’

The findings recommend sticking to the planned deficit reduction and proactively developing contingency measures to help protect fiscal credibility.

The IMF expects the UK’s deficit to fall in every year between 2025 and 2031, falling to the joint-lowest level (with Canada) in the G7 by 2029 - showing we have the right economic plan.
The IMF forecast that the UK will have the fastest cumulative growth among European G7 economies across 2026-27.

Further background on the economy:

We are the fastest growing economy in the G7 so far this year.
Q1 2026, GDP per capita grew at the fastest pace for a single quarter since Russia’s invasion of Ukraine.

Public Sector Net Borrowing (PSNB) was £19.8 billion lower in 2025-26 compared to 2024-25.

We have increased our headroom against the stability rule to £23.7bn so that we can weather shocks and keep borrowing costs down.

We are set to reduce the deficit by £20bn from 24-25 to 25-26 - from 5.2% to 4.3% of GDP.