Autumn Budget faces £50bn gap after IMF growth upgrade

Chancellor Rachel Reeves will deliver the Autumn Budget on Wednesday, November 26, 2025, facing the twin challenges of stronger-than-expected economic growth alongside persistent price pressures and a projected fiscal shortfall. New forecasts from the International Monetary Fund show the UK is expected to be the second-fastest-growing economy in the G7 next year, but also to record the highest inflation among major Western economies through 2025 and 2026, leaving Reeves with difficult choices on tax and spending.

The IMF upgraded Britain’s 2025 growth forecast to 1.3 percent, placing it behind only the United States among the world’s largest advanced economies. That upgrade follows stronger activity in the first half of the year, including households and businesses bringing forward spending ahead of tariff changes. At the same time, the IMF said inflation, which reached 3.8 percent in July and August, is likely to average 3.4 percent in 2025 and fall to about 2.5 percent in 2026. The fund cited rising food and hospitality prices, higher labour and tax costs, and temporary increases in water bills and rail fares as contributors to sustained price pressures.