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The IMF lowers its growth forecasts (rafapress / Shutterstock.com)
Despite falling to a two-month low against the US dollar yesterday afternoon, the pound ended Tuesday pretty much where it started the day against rival currencies.
The pound’s saving grace came from the International Monetary Fund, which has lifted its forecast for UK economic growth this year, in its new World Economic Outlook.
The IMF now predicts the UK economy will grow by 1.1% this year, up from the July forecast of 0.7%. This would make Britain the joint third fasted-growing economy in the G7, in line with France’s predictions and second to the US and Canada.
On a global scale, the IMF expects the world’s full-year growth to remain stable yet underwhelming, expanding by 3.2% in 2024. The major financial agency also revised 2025 growth estimates down to 3.2% from 3.3% previously.
Speaking in New York at the Bloomberg Global Regulatory Forum, Bank of England governor Andrew Bailey underlined his concerns for the bank to improve ways to track developments in the non-banking system. He said, “We are going to reach a point and we are reaching a point… where we need to pivot from rulemaking to surveillance.”
New data from the Office for National Statistics revealed the deterioration in the UK’s public finances continued in September, but the pace of decline slowed.
With the US presidential election just two weeks away, investment bank analysts from Goldman Sachs warned that the euro could drop 10% against the US dollar should Trump be victorious and should he impose widespread tariffs and cut domestic taxes.
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GBP: Professional job market declines
According to new data from the Robert Walters Global Jobs Index, the UK professional job market experienced a 5.62% decline in September. This comes as a huge surprise as recruiters usually find September to be their busiest month, hence the phrase ‘September surge’, however this failed to materialise last month as low business confidence and economic uncertainty weighed on the pound.
GBP/USD: the past year
EUR: Lagarde’s cautious remarks
European Central Bank president, Christine Lagarde said yesterday evening that she was committed to saving the euro. She also publicly invited Donald Trump to visit the ECB in Frankfurt following remarks from him suggesting that Lagarde had the easiest job in government.
EUR/USD: the past year
USD: US GDP growth estimates raised
The IMF raised US GDP estimates for 2024 to 2.8%, from 2.6% previously predicted in July this year. This prediction is due to stronger outturns in consumption and non-residential investment.
EUR/USD: the past year
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