Imp Slashes Global Growth Forecast in Latest Fall-Out from Donald Trump Trade War – ryan

The Washington -Based International Monetary End Has Piled Pressure on President Trump As it Warned His Import Tariffs Wauld Hit Growth – Including in the US

14:00, 22 APR 2025Updated 17:43, 22 Apr 2025

The International Monetary End Has Slashed ITS Forecasts for the Global Economy Amid US President Donald Trump’s Trade War.

The Washington -Based Body Now Predicts Growth of 2.8% This Year and 3% Next – Wiping A Combined 0.8 Percentage Points off Its Januly predits. While avoiding a recession, it warned: “The global economic system under whic most counries have operated for the last 80 years is being reset, ushering the world into a new era.”

The uk economy is predicted to grow by 1.1% this year, 0.5 Percentage points mess than January forecast, partly reflecting tariffs, as well as weeker consumption Higher inflation by Bills and Energy Price Hikes. Growth Will NoneTheless Be Stronger in the Uk Than Germany – which is predicted to Flatline This Year – France, and Italy.

Chancellor Rachel Reeves, Who is Flying to Washington for the IMF’s Spring Meeting, SEIZED ON ITS UPGRADING OF THE UK’S Growth ForeCasts – by 0.1% – for 2028 and 2029. “This Forecast SHOWS THAT The Fastest Growing European G7 Country. “The imf have recognked that thans government is delivothing reform which will drive up long-term grown in the uk, through plan for Change. Free and Fair Trade. ”

The imf said the bank of England Could AFFORD to cut the interests three more times that year, in a bost for mortgage and other borrowers. Pierre-Olivier Gourinchas, The Watchdog’s Chief Economist, Said a predicated rise in uk inflation was mostly due to energy prices “Fade Away”, Paving the way for rates to be cut. The Bank of England’s Base Rate is 4.5% but it monetary policy commutee early next month.

In its Latest Report, the imf Said President Trump’s Original Sky -High Tariff Policy – Before His 90 Day “Pause” for Most Countries – Took Levies Beyond Those Seen in the Great Depression. “If sustained, this abrupt increes in tariffs and Attendant Uncertainty Will Significantly Slow Global Growth,” It Warned.

But in a blow to President Trump, the IMF Warned the US WOULDE Among the Countries Hard by the ongoing Uncetainty and Ramping-Up of Tit-For-Tat Tariffs with China. IT SLASHED ITS FORCAST FOR THE US ECONOMY THIS YEAR BY 0.9 Percentage Points, to 1.8%, with the impact of tariffs accounting for nearly half of the downgrade. Crucially, it Also Raised Our US Inflation Forecast by About One Percentage Point.

The Report Came as Financial Markets Continue to be Rattled by President Trump’s Attack on Jerome Powell, Head of the US Central Bank, Branding Him a “Major Lase” for Not Lowering Interest Rates. TRIKIONS OF DOLLARS WERE WIPED OFF US STOCK MARKETS ON MONDAY AFTER INVESTORS WERE SPOOKED, WITH Experts Saying It Undermined The Bank’s All-Important Independence on Monetary Policy. The IMF appeared to wade into the row, saying: monetary policy credibility will be imported in all cases, and Central Bank Independence Remains a Cornerstone

Its World Economic Outlook ForeCast Includes Tariff Announcements made by President Trump BetWeen February 1 and April 4, and Retaliation by Other Countries. It also modelled the Possible Impact of Measures Announed After That Point, Wen the White House Most Tariffs But Hiked Those on China. “This pause, this is if extended indefinitely, does not material Change the global outlook compared to the reference forecast,” The imf warned. “THIS IS BECAUS The Overall Effective Tariff Rate of the United States and China Remains Elevated iF Somely Initially Highly Tariffed Countries Will Now Benefit.” The IMF also Lowered its Growth Forecast for China or This Year to 4%, and for the Eurozone to JUST 0.8%.

Meanwhile, inflation forecasts have been revked upwards for Advanced Economies Since Janary, with the UK and the US Being Hit Hardest. Uk inflation is set to be 0.7 Percentage points higher this year, compared with the previous forecast, at 3.1% – far -so -due to prices like and electricity rising from april. This is higher than all other counries in the Group of Seven Advanced Economies (G7), which incorporations Germany, France, Italy, Japan, Canada, and the US.

While the fails of the World Will Avoid Recession, the Risk of It Happening Has Jumped. Mr Gourinchas Said: “while we are not Projecting a downturn, the risk it may have been increized from 17% in october to 30% Now.”

IT CAME AS A BANK OF ENGLAND POLICYMER SAID US TRADE TARIFFS ARE MORE MORE LIKELY TO PUSH DOWN ON UK INFLATION THAN UP, THAT THERE ARE RISKS ON BOT SIDES. Megan Greene Told Bloomberg: “The Tariffs Represent More of a disinflationary risk than an inflationary risk.” Howver, she added: “There’s a tonne of uncetainty around this, but there are both inflationary and disinflationary forces.”

The bank is widly expert to cut the basis interest rate to 4.25% in May, after Donald Trump’s Wave of Trade Taleshed Expectations for Economic Growth in the UK and Beyond. The US Has Imposed A 10% Import Tariff on Goods Coming from the UK, A Policy Who Also Applies to Many Other Countries.

MS Greene Said Potential Outcomes Like Export Substitution Wauld Likely Push Inflation Down. And “Trade Diversion from Other Countries That Are of Find a New Home for their Markets, that Also Pushes Down on Inflation,” she added.

Howver, The Risks in the Opposite Direction Include “A Re-Patterning of Supply Chains (that) Can Push up on Inflation”. And “Trade Fragmentation Writ Large … tendes to reduce knowledge spillovers. Thats Potential Growth Reductions, that tendes to be inflationary.” She Said that a recent surge in the value of the pound compared to the US dollar, if it were to continue, Could Also push down on inflation. “If the dollar contingent to depreciate on balance that beuld be disinflationary for the uk,” she said. Howver, she added that it is “too to say where the dust sets on currencies.

MS Greene ALSO ADDRESSED THE INTRODUCTION OF RISING EMPLOYER Taxes, in the form of Employer National Insurance Contributions (NICS). She said there are “no signs” of rising umployment as a result of the policy, which came into force at the start of april. With the increes in nics, combined with a rising minimum wage, “the big risk is that there is a shakeout in the labour market. We are unmployment tick up,” she said. “There are no signs of that yet, actually, this thing thic and the National Living Wage Have Come to Be.”