IMF WEO: Modestly Downgrades Outlook For UK Economy In 2017

--WEO Sees UK 2017 Growth At 1.7% vs 2.0% April Forecast

By Les Commons

     LONDON (MNI) - The International Monetary Fund sees economic growth in the

UK modestly lower than previously forecast for the current year, weighed by

weaker than expected domestic demand as the country prepares to leave the

European Union, the October edition of the World Economic Outlook shows.

     The IMF now sees UK growth in 2017 at 1.7%, 0.3 percentage point lower than

envisaged at the time of the April WEO.

     However, the IMF forecasts have left 2018 growth expectations unchanged at

1.5%. Both the 2017 and 2018 forecasts are unchanged from the July 2017 update.

     The weaker-than-expected growth "the slowdown is driven by softer growth in

private consumption as the pound's depreciation weighed on household real

income," the IMF WEO says.

     The IMF still see Brexit likely having an adverse impact on the UK economy,

with the fallout starting to impact from next year, but dependent on any trade

deal.

     "The medium-term growth outlook is highly uncertain and will depend in part

on the new economic relationship with the EU and the extent of the increase in

barriers to trade, migration, and cross-border financial activity," the report

added.

     The IMF see inflation picking up in 2017, sitting above the Bank of

England's 2% inflation target in both 2017 and 2018. The WEO forecasts inflation

at 2.6% in 2017, up from 2.5% in the April forecast, and 2.6% in 2018.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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