In its World Economic Outlook report released today (14 April), the IMF projected that the UK economy will expand by just 0.8% this year, down from 1.3% in 2025, before rising again to 1.3% in 2027.
The UK’s 2026 growth outlook places it behind many advanced economies, with the United States projected to expand almost three times faster at 2.3%, even though it is also affected by the conflict.
The EU is expected to perform slightly better, with 1.1% growth across the bloc, though Germany is forecast to match the UK at 0.8%. Japan is set to lag further behind with 0.7% growth.
The IMF warned that global growth is being tested by the war in the Middle East, noting that trade barriers and uncertainty are being partly offset by tech investment, easier financial conditions, and policy support.