It’s not just Britain that has a growth problem. Today’s release of the IMF’s April 2024 World Economic Outlook report argues that the global economy is following the lacklustre trend. Global growth is expected to sit at 3.1 per cent by 2029: ‘at its lowest in decades’. Global growth is forecast to move at the same pace this year as it did last year, growing at 3.2 per cent in 2024 and 2025. This year’s forecast is a small, 0.1 percentage point uplift from the IMF’s January prediction, yet the forecaster warns that higher interest rates, weak productivity, and ongoing international insecurity will all continue to combine to suppress growth.

Within this bleak picture, how does the UK look compared to its counterparts? As has been the case for some time now, the IMF’s outlook for Britain isn’t great – but is not the worst among advanced nations. The IMF predicts the UK economy will grow by 0.5 per cent and 1.5 per cent in 2024 and 2025 respectively, a 0.1 per cent downgrade in both years compared to its predictions at the start of the year.

This is notably lower than the G7 predicted averages over the next two years, which show an uptick of 1.7 per cent and 1.6 per cent. But Britain’s prospects look stronger than Germany’s 0.2 per cent growth forecast for this year, and by next year the UK will sit more comfortably in the middle of the pack, with slightly higher growth expected in the UK than in Japan (1 per cent), Germany (1.3 per cent) or France (1.4 per cent).

For some, the IMF’s predictions will be far too gloomy. After all, the organisation has a rather mixed track record when it comes to making predictions about the UK economy, insisting at the start of last year that Britain would have the worst growth figures among the G7 in 2023 (a label that, in the end, belonged to Germany). The slight problem for the optimists is that the IMF’s calculations are not too far off the most recent set of forecasts from the March Budget. The Office for Budget Responsibility calculated a slightly better outcome – 0.8 per cent growth this year and 1.9 per cent growth next year – but nothing too spectacular.

Meanwhile the IMF’s forecasts for the UK’s inflation trajectory are broadly similar to what the Bank of England expects will happen this year, with inflation ending the year slightly above target (the IMF predicts 2.5 per cent), as the headline rate is expected to slow to target (or below) this spring thanks to falling energy prices, but then tick up slightly in the autumn.

The real problem for Britain – and indeed many developed countries – is not whether these forecasts are on the nose, but rather that they are all very far off a meaningful ramp up in economic growth. The best forecasts for Britain are that it skims the surface of 2 per cent growth in the medium term, generating still not nearly enough additional activity and revenue to make good on the many spending promises that have been made (and continually ramped up) to the public. Staying on the right side of the recession line (where the UK likely is now) is simply not going to cut it. Far more spectacular growth rate is needed to get Britain’s economy, and finances, on a sustainable track.