IMF urges BoE to stay flexible, ready to cut rates as UK growth improves
TL;DR Summary
The IMF lifted its 2026 UK growth forecast to about 1% and said the Bank of England should remain ready to cut rates if needed, even as holding at 3.75% may be appropriate to limit second-round inflation effects. With energy prices pushing inflation higher in the near term and then easing, the IMF expects inflation to return to target by end-2027 as growth gradually recovers, arguing for data-driven, meeting-by-meeting policy decisions.
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