Bulletin · BBC Stocks
Key events 6m ago IMF economic counsellor tells UK to 'stay the course' 16m ago Introduction: IMF upgrades UK growth outlook for this year IMF economic counsellor tells UK to 'stay the course' Heather Stewart Launching the IMF’s report in Bangkok, Silvana Tenreyro , the IMF’s economic counsellor, warned, “the global economy has been resilient, but that resilience is reaching its limits”. She urged policymakers to, “move from just coping, to rebuilding”. Tenreyro, a former member of the Bank of England’s monetary policy committee, added that the UK “stands out,” from other G7 countries in having a plan to repair its public finances.
“The UK has already started a consolidation process,” she said. “The message for the UK is simply, stay the course”. The IMF has also warned today that the threat of an AI share price crash rippling out across global markets is putting world financial stability at risk.
In its twice-yearly Global Financial Stability Report, the IMF highlighted the sky-high valuations for AI companies along with their increasing debt pile as one reason that risks in the system are “elevated”. “The consequences of an AI correction could be global,” it warned. Aside from the US, Asian markets would be most exposed, and the UK and euro area potentially more insulated – though investors with US holdings would be hit.
Looking over at Asian stock markets today, it seems a timely warning – the MSCI index of Asia-Pacific shares is down 2%, its lowest level since late July, led by a sell-off in Asian chip companies. The South Korean Kospi, which relies heavily on its chip makers Samsung Electronics and SK Hynix, is down 6.6% on fears around an AI slowdown. The sell-off followed a drop in US chip makers yesterday, after a reports of rapid developments by Chinese rival ChangXin Memory Technologies (CXMT) .
Japan’s Nikkei 225 index is down 1.9%, while Taiwanese stocks are down 2%. Introduction: IMF upgrades UK growth outlook for this year Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy. The International Monetary Fund has increased its growth forecast for the UK this year, but has said that it expects a modest slowdown in 2027 as higher energy prices take effect.
The upgrade will be welcome news for the chancellor, John Healey , who will arrive in Bangkok later this week to attend the IMF’s annual meetings for the first time. The IMF , which publishes its World Economic Outlook twice a year, has predicted GDP growth of 1.3% for the UK this year – up 0.3 percentage points from its most recent update in July. However, the IMF also warned that high oil prices and rising interest rates meant growth was likely to “edge down” in 2027, “as higher energy prices and long-term interest rates weigh on consumption and investment”.
It cut its UK growth forecast for next year modestly to 1.2%, from 1.3%. The IMF singled out the UK as among the countries where core inflation – which excludes volatile commodities such as energy – is not expected to return to the 2% target until late next year. It expects average inflation in the UK to be 3.3% this year, and to remain at 2.8% in 2027 – a challenge for Healey and the prime minister, Andy Burnham , who are promising to offer voters a “breathing space” from rising costs.
It comes just weeks ahead of Healey ’s first budget on 28 October. He is expected to focus on plans to devolve more tax revenues to mayoralties, as well as measures to help households cope with higher energy bills ahead of the winter. The Institute for Fiscal Studies (IFS) warned this week that the budget would be a “work of fiction” unless Healey explained how he would deal with what it said were £35bn of future spending pressures.
The IMF’s growth upgrade follows from the fact that UK GDP has been stronger than expected in early 2026, at 0.6% in the first quarter and 0.5% in the second quarter. The agenda 7am BST: Reach trading statement, Marston’s trading statement, Bellway full-year results, Whitbread interim results 8am BST: Worldpanel by Numerator UK grocery inflation report 9.45am BST: Nikhil Rathi to face questions from the Treasury Committee 12pm BST: JP Morgan, Citigroup and Wells Fargo Q3 earnings 12.30pm BST: Goldman Sachs Q3 earnings
Source: The Guardian
