IMF hikes UK growth outlook amid lower inflation and interest rates [Video]

LONDON — The International Monetary Fund on Tuesday raised its 2024 growth outlook for the United Kingdom, saying declines in interest rates and inflation would boost domestic demand.

The IMF now sees 1.1% growth for the U.K. economy this year, up from a July forecast of 0.7%. The agency also reiterated its forecast for a 1.5% expansion in 2025.

Inflation in the U.K. came in at 1.7% in September, a decline from 11.1% in October 2022. Lower rates of services inflation and wage growth have led economists over the last week to forecast a faster pace of interest rate cuts from the Bank of England, forecasting the central bank will take its key rate from 5.25% at the start of the year to 4.5% by the end of 2024.

Economic growth has been tepid so far this year, coming in at 0.2% in Augustafter flatlining in …