SNP say Labour must ‘wake up to economic reality’ as IMF slashes global growth forecasts

Publishing its world economic outlook, the IMF warned tariffs were causing global trade disruption and unprecedented uncertainty, with the UK economy predicted to grow by 1.1 per cent this year, 0.5 per cent less than January’s forecast.

The organisation said it is slashing its global growth forecast by 0.5 percentage points this year, with nearly all countries seeing a downgrade.

Responding, SNP economy spokesperson, Dave Doogan MP said: "Growth slashed, unemployment rising and the cost of living soaring - this is a far cry from the change voters were promised by the Labour Party before the election. It's not good enough to blame global events when it is policies from the Labour Government - be it National Insurance rises or Brexit - that are hammering businesses and public services in the here and now.

"The Labour Party keep telling us the world has changed, but for those words to mean anything then there must be a response to match the weight of the IMF warnings today - so far that's been missing from Sir Keir Starmer with no meaningful move towards alignment with the EU and a dedication to fiscal rules unfit to shelter us from the global economic storm clouds that are fast gathering.

“The EU is where most European nations seek both economic and national security, yet we find ourselves isolated in broken, Brexit Britain scraping around for a deal on minor changes to food standards while we are being whacked by Trump tariffs - the Labour Party needs to wake up to the reality that any economic deal with the United States will always pale in comparison to the benefits of the European Single Market.

"The IMF has forecasted an economic storm headed directly for these islands and it's time Westminster got its head out the sand, stopped playing to Farage's tune and looked to our reliable allies in Europe for protection and economic growth.”

Despite the revised forecasts, growth will nonetheless be stronger in the UK than Germany – which is predicted to flatline this year – France, and Italy.

Meanwhile, inflation forecasts have been revised upwards for advanced economies since January, with the UK and the US being hit hardest.

The latest World Economic Outlook report was produced under “exceptional circumstances”, with the IMF being forced to change its projections after US President Donald Trump unveiled a range of new and higher tariffs earlier this month.

UK inflation is set to be 0.7 percentage points higher this year, compared with the previous forecast, at 3.1 per cent– largely due to prices like water and electricity rising from April.

This is higher than all other countries in the group of seven advanced economies (G7), which incorporates Germany, France, Italy, Japan, Canada, and the US.

Chancellor of the Exchequer Rachel Reeves said the new forecasts show “the UK is still the fastest-growing” European country in the G7.

“The IMF have recognised that this Government is delivering reform which will drive up long-term growth in the UK, through our Plan for Change,” she said.

“The report also clearly shows that the world has changed, which is why I will be in Washington this week defending British interests and making the case for free and fair trade.”