UK economy will unexpectedly dodge recession — as IMF tears up gloomy predictions

BRITAIN will dodge the bullet of a recession after all — as global financial watchdog the IMF tore up its doom-laden predictions.

Inflation is expected to dip to single digits today for the first time since last autumn.

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IMF managing director Kristalina Georgieva pictured with Chancellor Jeremy Hunt in Downing Street yesterday[/caption]

And there were hopes the UK’s wobbly economy had turned a corner.

Energy bills are also expected to drop by around £500 a year when the quarterly price cap is announced tomorrow.

The International Monetary Fund upgraded its predictions for UK growth to 0.4 per cent this year after initially forecasting last month that output was expected to shrink by 0.3.

The economists pointed to “somewhat reduced post-Brexit uncertainty” and better-than-expected resilience of the UK economy for their U-turn.

IMF managing director Kristalina Georgieva, who met Chancellor Jeremy Hunt in Downing Street yesterday, said the assessment reflects “favourably” on the UK in comparison to other G7 countries.

But while she praised PM Rishi Sunak and Mr Hunt for getting a grip on inflation, there was little to cheer for taxpayers.

In a blow to Tory MPs demanding a reduction, she said there was “no intention to go for tax cuts” in the UK.

And the IMF warned Britain will not see strong growth without massive reforms to get the 5.2 million on out-of-work benefits back into jobs.

While growth is in a stronger position than in France and Germany, the IMF warns: “Realising the UK’s full growth potential will require wide-ranging, further evidence-based reforms, including addressing the post- pandemic rise in labour inactivity, mainly due to long-term illness.”