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The UK economy will grow more than previously thought, according to the International Monetary Fund (IMF), which has upgraded its latest forecast.

But it warned trade tensions linked to US tariff plans will reduce UK economic growth next year.

The Washington-based UN financial agency said the UK economy will expand 1.2% this year and “gain momentum next year”.

The upgrade in forecasts, however, is slight, up from an expected 1.1% announced in April as the world reeled from the global trade war sparked by US President Donald Trump’s tariffs.

That April figure was a 0.5% downgrade from the projected 1.6% growth for 2025 the IMF foresaw in January and the 1.5% forecast issued in October.

It means the IMF expects the UK economy to grow less this year than it forecast in October and January.

Money blog: Britons face 100% property tax in Spain

Tariffs warnings

This anticipated lower growth is largely due to tariffs – taxes on goods imported to the United States – and the uncertainty caused by shifting trade policy in the US, the world’s largest economy.

While many tariffs have been paused until 8 July, it’s unclear if deals will be in place by then and if pauses may be extended.

The effect of this has been quantified as a 0.3 percentage points lower growth by 2026 in the UK, the IMF said.

The organisation held its prediction that the UK economy will grow by 1.4% in 2026.

“The forecast assumes that global trade tensions lower the level of UK GDP by 0.3% by 2026, due to persistent uncertainty, slower activity in UK trading partners, and the direct impact of remaining US tariffs on the UK,” it said.

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Trump’s tariffs: What you need to know

It comes despite the UK having agreed a deal with the Trump administration to circumvent the 25% tariffs on cars and metals.

The IMF also cautioned that “weak productivity continues to weigh on medium-term growth prospects”.

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Interest rates “should” continue to come down, making borrowing cheaper, though the IMF acknowledged the rate-setters at the Bank of England now have a “more complex” job due to the recent rise in inflation and “fragile” growth.

The author of the report on the UK Luc Eyraud said the IMF expected the Bank to cut interest rates by 0.25 percentage points every three months until they reach a level of around 3%, down from the current 4.25%.

Praise was given to the UK government as the IMF said “fiscal plans strike a good balance between supporting growth and safeguarding fiscal sustainability”.

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The news is being taken as a win by Chancellor Rachel Reeves.

“The UK was the fastest growing economy in the G7 for the first three months of this year and today the IMF has upgraded our growth forecast,” she said.

“We’re getting results for working people through our plan for change – with three new trade deals protecting jobs, boosting investment and cutting prices, a pay rise for three million workers through the national living wage, and wages beating inflation by £1,000 over the past year.”

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SEC approves conversion of Grayscale’s large-cap crypto fund into ETF

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<div>SEC approves conversion of Grayscale's large-cap crypto fund into ETF</div>

<div>SEC approves conversion of Grayscale's large-cap crypto fund into ETF</div>

Grayscale has slowly narrowed the arbitrage opportunities on its crypto trusts by converting them into exchange-traded funds.

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Chief rabbi condemns BBC’s ‘mishandled response’ to anti-IDF chanting at Glastonbury – as Bob Vylan issue new statement

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Chief rabbi condemns BBC's 'mishandled response' to anti-IDF chanting at Glastonbury - as Bob Vylan issue new statement

The chief rabbi has described the BBC’s response to anti-IDF chanting at Glastonbury as “belated and mishandled” – as the punk-rap duo involved, Bob Vylan, said the UK government needed to talk about its “criminal inaction”.

Sir Ephraim Mirvis said “vile Jew-hatred” had been aired at the Somerset music festival and it was a “time of national shame”.

Confidence in the BBC’s “ability to treat antisemitism seriously” has been brought to a “new low”, he said in a post on X, adding that “outright incitement to violence and hatred” appeared to be acceptable if it was couched as “edgy political commentary”.

Ordinary people had not only failed to see incitement “for what it is” but had cheered it, chanted it, and celebrated it, he said. “Toxic Jew-hatred is a threat to our entire society,” he added.

Bob Vylan, posting a new statement on Instagram on Tuesday, said they were “not for the death of Jews, Arabs or any other race or group of people”.

Rather, they were for the “dismantling of a violent military machine” – the Israel Defence Forces.

Bob Vylan chanted “death to the IDF” at Glastonbury. As many as 95% of the IDF are thought to be Jewish.

In their statement, the group said they were a “distraction from the story” and that whatever “sanctions” they received would also be a distraction.

Their US visas have been revoked and United Talent Agency, their US representatives, have dropped them.

Bob Vylan with their MOBO award in London in November 2022. Pic: Reuters
Image:
Bob Vylan with their MOBO award in London in November 2022. Pic: Reuters

Referring to the war in Gaza, they claimed the UK government does not want them to ask “why they remain silent in the face of this atrocity”, “why they aren’t doing more to stop the killing” and “feed the starving”.

They added: “The more time they talk about Bob Vylan, the less time they spend answering for their criminal inaction.

“We are being targeted for speaking up. We are not the first, we will not be the last, and if you care for the sanctity of human life and freedom of speech, we urge you to speak up, too.”

It has emerged that Tim Davie, the BBC’s director-general, was at Glastonbury when the duo led chants of “Death to the IDF” which were broadcast live.

The prime minister’s spokesman, asked if the PM had confidence in Mr Davie, said Sir Keir Starmer had “confidence in the BBC”, adding: “The position of the director-general is a matter for the BBC’s board.”

Speaking in the Commons, Culture Secretary Lisa Nandy said “accountability” was important and it was something she had “impressed upon the BBC leadership”.

She added: “When you have one editorial failure, it’s something that must be gripped. When you have several, it becomes a problem of leadership.”

The cabinet minister said she’d called Mr Davie after Bob Vylan’s set had been broadcast to find out why it had aired, and why the feed had not been cut.

“I expect answers to these questions without delay,” she said.

Meanwhile Dame Caroline Dinenage, chair of the culture, media and sport committee, has written to Mr Davie in relation to the corporation’s Glastonbury coverage.

The committee has said the letter asks about editorial and decision-making processes and whether consideration was given to broadcasting with a delay. It also asks about staffing levels at the festival and contingency planning.

Secretary of State for Culture, Media, and Sport Lisa Nandy arrives in Downing Street, London, for a Cabinet meeting. Picture date: Tuesday May 13, 2025.
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Lisa Nandy, the culture secretary, has claimed there is a ‘problem of leadership’ at the BBC. File pic: PA

Avon and Somerset Police has begun a criminal investigation and is reviewing footage of both Bob Vylan and Kneecap’s performances at Glastonbury.

The force said a senior detective had been appointed – and it had been contacted by people from around the world.

“We… recognise the strength of public feeling,” it said.

During Kneecap’s set, one member suggested starting a “riot” outside his bandmate’s forthcoming court appearance, before clarifying that he meant “support”. Liam Og O hAnnaidh, also known as Mo Chara, is charged with a terror offence.

Moglai Bap and Mo Chara of Kneecap perform at Glastonbury. Pic: Reuters
Image:
Moglai Bap and Mo Chara of Kneecap performing at Glastonbury. Pic: Reuters

Bob Vylan had been due to tour the US before their visas were revoked.

US deputy secretary of state Christopher Landau said action had been taken “in light of their hateful tirade at Glastonbury, including leading the crowd in death chants”.

“Foreigners who glorify violence and hatred are not welcome visitors to our country,” he added.

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During Bob Vylan’s set, the duo performed in front of a screen that showed several messages, including one that claimed Israel’s actions in Gaza amounted to “genocide”.

The war in Gaza began after Hamas militants attacked Israel on 7 October 2023 and killed 1,200 people and took about 250 hostage.

Israel’s offensive in Gaza has led to the deaths of more than 56,500 people, according to the Hamas-run health ministry, which does not differentiate between civilians and combatants.

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Media watchdog Ofcom has said the BBC “clearly has questions to answer” over the live stream from Glastonbury.

A BBC spokesperson said: “The director-general was informed of the incident after the performance and at that point he was clear it should not feature in any other Glastonbury coverage.”

The broadcaster respects freedom of expression but “stands firmly against incitement to violence”, they said.

They added: “The antisemitic sentiments expressed by Bob Vylan were utterly unacceptable and have no place on our airwaves…

“The team were dealing with a live situation, but with hindsight we should have pulled the stream during the performance. We regret this did not happen.”

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Connecticut governor approves law prohibiting crypto use in government

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Connecticut governor approves law prohibiting crypto use in government

Connecticut governor approves law prohibiting crypto use in government

Many provisions of the legislation, which received overwhelming support in the state House and Senate, take effect on Oct. 1.

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