Reeves to touch down in Washington after IMF warns of rising UK inflation

Rachel Reeves will arrive in Washington DC for talks at the International Monetary Fund (IMF) after it warned UK inflation is set to surge to the highest in the G7 in 2025 and 2026.

The Chancellor is to champion Britain as a place where investors and businesses can count on economic stability during meetings at the IMF and the World Bank.

Her trip to the US comes after the influential economic body said in its latest report that price inflation in the UK would increase more sharply than expected in both years compared with previous predictions from July.

The IMF increased its UK growth forecast for this year but reduced its prediction for 2026 amid concerns over the labour market.

Britain is set to be the second fastest growing G7 country this year, the IMF also said, with only the US growing faster.

As political leaders and central bank chiefs gather in DC, the Chancellor will insist that the UK’s adherence to her fiscal rules are a bedrock for economic growth and international investment.

She will point to the Government’s National Wealth Fund as among the steps taken to create an investor-friendly environment in the UK.

Ahead of the journey, Ms Reeves said: “Our Plan for Change is delivering national renewal built on the rock of economic stability – the foundation for more security, more respect and more opportunity for every part of the UK.

“In Washington I will showcase Britain’s commitment to fiscal responsibility – while creating the conditions to boost productivity, attract investment and secure our place as a strong and credible partner in a stable global economy.”

While in Washington, the Chancellor is also expected to attend a Ukraine round table to drum up investment for the war-torn nation, and will meet with US financial firms to highlight what the UK has to offer to them.

On Tuesday, the IMF said it expects UK inflation to average at 3.4% in 2025, increasing from its previous prediction of 3.2%.

The forecasts also showed that UK inflation is expected to slow slightly to 2.5% next year, but this is nonetheless above the 2.3% prediction from earlier this year.

It means UK households are therefore expected to face the highest rate of price inflation across all the G7 group of advanced economies over the two years.

Meanwhile, the UK economy is expected to grow by 1.3% this year, after being boosted by strong growth in the first half.

It represents an improvement against the previous IMF forecast of 1.2%.

However, the IMF has now cut its growth prediction for next year from 1.4% to 1.3% as global trade pressures threaten to impact on many economies.

Canada and France also saw their growth projections reduced amid pressure from tariff headwinds, while the US saw its forecast rise slightly.

Global growth for this year has also been upgraded from 3% to 3.2% in the report, with many economies proving to be more resilient than expected in the face of tariff pressures.

The IMF said growth early in the year surpassed expectations as spending was brought forward, while many economies have also benefited from smaller increases in US tariffs than originally announced.