Stories

Wed, 14 Oct 2026

Wed, 14 Oct 2026 Faisal Islam: What surprise praise for UK economy tells us about the Budget

On three occasions in the past 24 hours, top IMF officials have praised UK plans to reduce its annual levels of borrowing.
The IMF's Managing Director, Kristalina Georgieva, has praised the UK's efforts to reduce its debt, calling it "a country where action to reduce debt and deficit has been taken decisively". This stands out from the rest of the G7 countries, including the US, Germany, and Japan, which are increasing borrowing. The IMF notes that only the UK among the G7 has a serious plan for consolidating its annual borrowing over the next few years. The UK's fiscal health is in order, with a planned reduction in borrowing worth nearly 4% of the size of the economy. This is in contrast to other major economies, which are either increasing borrowing or keeping it at the same level. As a result, the IMF sees the UK as having a better growth prospect compared to its peers. The UK's finance minister will likely have limited room for extra spending in next week's budget, and may opt for modest tax rises instead. This could mean disappointment for public services expecting increased funding to account for rising inflation. The Chancellor's plans are likely to be shaped by the IMF's recommendations, with a focus on reducing debt and deficit. This could lead to lower relative borrowing costs for government and households in the long term.