The UK economy is on the way to recovery amid falling inflation, Jeremy Hunt claims as the IMF says growth is being powered by a rising population rather than economic dynamism

•  GDP will grow just 0.5 per cent in 2024, International Monetary Fund predicts 
•  Analysts also found GDP of UK has largely been boosted by migrant workers
•  UK slipped into recession at end of last year but is now on its way to recovery 

GDP in the UK will grow just 0.5 per cent in 2024 – powered by a rising population rather than a dynamic economy, the International Monetary Fund (IMF) predicts.

However, with falling inflation and predicted ­interest-rate cuts, the Government is confident ­Britain is on the road to economic recovery.

The GDP of the UK has been boosted by ‘inflows of migrants’, the IMF’s World Economic Outlook found.

It trimmed growth forecasts for the UK by 0.1 percentage points for this year and next, to 0.5 per cent and 1.5 per cent respectively.

The IMF forecasts that, when calculated per head, GDP – which measures the monetary value of goods and services produced within Britain – will flatline in 2024.

The UK and other advanced economies have seen their workforces boosted by ‘increased inflows of migrants with faster growth in the foreign-born than in the domestic-born labour force’, the IMF said in its latest World Economic Outlook.

Its analysis showed that the foreign-born workforce had grown by around 20 per cent since the start of 2019, whereas the UK-born labour force had slightly shrunk over the same period.

The Office for Budget Responsibility, the Government’s fiscal watchdog, has predicted that net migration will average 350,000 annually over the next five years.

However, with inflation also falling faster than previously expected and interest rate cuts on the way, the projections suggest Labour will inherit a healthier economy than feared should it win the next election.

The UK slipped into recession at the end of last year but is now on the road to recovery and growth this year.

Next year, the UK economy is expected to outstrip Germany, France and Italy after even sharper downgrades by the IMF for the eurozone’s three biggest economies.

Chancellor Jeremy Hunt said the IMF update showed ‘the UK economy is turning a corner’, adding: ‘Over the next six years we are projected to grow faster than large European economies such as Germany or France, both of which have had significantly larger downgrades to short-term growth.’

The UK’s post-Brexit economy continues to outpace most of its biggest rivals in the Eurozone.

Next year Britain’s economy will expand faster than Germany at 1.3 per cent and France at 1.4 per cent. Italy is facing two years of sluggish output at 0.7 per cent.

If the IMF is correct, Britain will have slain the inflation enemy which has impacted the cost of living for ordinary Britons.

That should enable the Bank of England to lower interest rates from the current headline rate of 5.25 per cent and provide much need relief to homeowners facing sharp rises in mortgage rates when they renew fixed rate loans.

A sharp downturn in inflation and interest rates is made possible by what the IMF says has been a ‘rapid fading’ of the price shocks caused by Russia’s war on Ukraine.

Current tensions in the Middle East, inflamed by Iran’s drone and missile assault on Israel, could potentially lead to a new oil price shock and throw the improvement in the global and UK economies off course.