Chancellor Rachel Reeves has been warned by the International Monetary Fund (IMF) that she cannot simply blame Donald Trump for Britain's faltering economy.
The IMF yesterday delivered a brutal verdict on Labour's economic record as it slashed the UK's growth forecast to just 1.1 per cent.
This represents a significant downgrade of 0.5 percentage points since the start of the year.
The IMF warned that the UK now faces the highest inflation in the G7, deepening the cost-of-living crisis which Labour vowed to end.
Chancellor Rachel Reeves has been warned by the International Monetary Fund that she cannot simply blame Donald Trump for Britain's faltering economy
PA
In its assessment, the international body stated that domestic factors had played the "biggest role" in its decision to downgrade the UK growth forecast.
It comes as the UK's borrowing costs soared higher than expected this morning, according to the latest figures from the Office for National Statistics (ONS).
Britain's statistics authority found that public sector net borrowing rose to £151.9billion in the year to the end of March despite Labour's attempts to manage the nation's
This figure is £14.6billion higher than the £137.3billion projected by the Office for Budget Responsibility (OBR) ahead of the publication of today's figures.
Reeves attempted to deflect blame for the worsening outlook, suggesting that Trump's "Liberation Day" tariffs were the driving factor.
MORE LIKE THIS:
Reeves attempted to deflect blame for the worsening outlook, suggesting that Trump's 'Liberation Day' tariffs were the driving factor
Getty
"The report clearly shows that the world has changed," she said last night.
However, IMF chief economist Pierre-Olivier Gourinchas contradicted this, stating domestic factors such as surging utility bills and higher government borrowing costs following Reeves's autumn Budget were the UK's biggest problems.
Shadow Chancellor Mel Stride described the IMF's findings as a "worrying indictment of Labour's economic approach".
"Less than a year into its Government, Britain is already seeing the consequences of Labour's high-tax, high-spend agenda," he added.
Stride further warned that "Labour's policies are stifling growth, pushing up the cost of living and leaving us vulnerable to external shocks".
The IMF's global GDP growth estimate was also lowered by 0.5 percentage points to 2.8 per cent in what was described as a bleak report.
Reeves travelled to Washington last night, where she will make the case for global free trade.
The IMF warned that the UK now faces the highest inflation in the G7, deepening the cost-of-living crisis which Labour vowed to end
PA
Trump's tariff plans triggered global market turmoil, including rising costs for UK Government borrowing.
Tax hikes and price increases for water, energy and other public services are expected to push inflation up to 3.1 per cent this year.
Despite the growth downgrade, Britain is still predicted to outperform competitors in Germany, France and Italy, which will stagnate in 2025.
These European nations show no signs of any significant upturn until 2026.
Despite the downgrade, she noted that the IMF forecast "shows that the UK is still the fastest-growing European G7 country".
The IMF blamed the UK downgrade on "recent tariff announcements, an increase in gilt yields and weaker private consumption amid higher inflation".
However, the UK's growth prospects over the next two years were cut by more than any leading European nation.
Most read
More
