The International Monetary Fund (IMF) has slightly raised its economic growth forecast for the United Kingdom this year, according to its regular assessment of the country's economy.
The IMF also advised UK Finance Minister Rachel Reeves to remain committed to her plan to reduce public borrowing.
The IMF now expects UK growth to reach 1.2% this year, slightly up from the 1.1% forecast made in April.
Despite the challenges from US tariffs, which are expected to reduce annual output by 0.3%, growth is expected to increase to 1.4% by 2026.
The IMF's mission chief to the UK, Luc Eyraud, said the revision to the forecast was made following the strong GDP performance in the first quarter of this year.
He also stressed the resilience of the UK economy amid a complex and uncertain external environment.
The IMF also expects the Bank of England (BoE) to cut interest rates by a quarter point each quarter until it reaches around 3%. This is a significant reduction from the current rate of 4.25%, according to Eyraud.
