LONDON: The IMF on Tuesday delivered a major U-turn on its forecast for the UK economy, saying it expected growth this year, just one month after predicting a contraction.

Britain’s economy is now expected to expand by 0.4 per cent in 2023, the International Monetary Fund said in its latest outlook document which partly cited weaker energy prices.

The institution ripped up its previous forecast in April for a 0.3pc contraction.

Addressing a London press conference, IMF managing director Kristalina Georgieva defended the U-turn.

She said it had been sparked by falling energy prices, easing concerns over Brexit and improving financial stability following recent UK political turmoil and US banking-sector woes.

She praised Britain for taking “decisive and responsible steps” in recent months, including overseeing a rescue deal by British bank HSBC for the British arm of collapsed US lender SVB.

Published in Dawn, May 24th, 2023