The UK avoids recession in 2023 and maintains growth

The United Kingdom will avoid falling into a recession in 2023, and the economy should maintain “growth,” the International Monetary Fund said on Tuesday, May 23, in an update to its outlook for the country.

However, the organization admitted that growth prospects for the UK were “moderate”, estimating that the increase would be around 0.4% this year.

Last April, the International Monetary Fund predicted that UK economic output could contract by 0.3%.

Lower energy prices are expected to “significantly reduce annual inflation to around 5% by the end of 2023 and below the 2% target by mid-2025,” according to the International Monetary Fund.

The UK's annual inflation rate is 10.1%, well above the Bank of England's target of 2%.

“The British authorities have taken decisive measures to strengthen macroeconomic and financial stability and are focusing on combating inflation and reforms to increase productivity, employment and investment,” International Monetary Fund Director General Kristalina Georgieva said on Tuesday on Twitter.

According to data released earlier this month by the Office for National Statistics (ONS), UK GDP grew by 0.1% in the first quarter of 2023, up from 0.0% in the previous quarter.

British Chancellor of the Exchequer Jeremy Hunt said on Tuesday that the International Monetary Fund's forecast represents a “significant improvement” to the UK's growth prospects and gives credit to its measures to restore stability and control inflation.

The minister defended the government's measures and stressed that if successful, the IMF would confirm that “long-term growth prospects are stronger than those of Germany, France and Italy.”

The British government chose not to cut taxes, while the Bank of England decided to increase interest rates to control inflation.

The Office for National Statistics reported today that the UK's accumulated net debt reached £2.53 billion (€2.9 billion) at the end of March, or 99.2% of the country's GDP, a level not seen since the early 1960s.

During that month, debts reached 25,600 million pounds (29,440 million euros), 11,900 million pounds (13,685 million euros) more than in April last year, according to the Office for National Statistics.