How Might The IMF Growth Downgrading Affect Everyone

23rd April 2025

The effects of the IMF's downgraded forecast on UK consumers could unfold over the next few months to a year, depending on how businesses, markets, and policymakers react. Here's a rough timeline:

Short-Term (Weeks to Months)
Investor & Business Confidence: Businesses may pause hiring or adjust pricing in response to economic uncertainty.

Stock Market Fluctuations: Market shifts can affect pensions and investments almost immediately.

Interest Rates & Borrowing Costs: The Bank of England may react to economic concerns by adjusting interest rates, impacting mortgages and loans.

Medium-Term (3-6 Months)
Inflation Pressures: Rising inflation could increase the cost of goods and services, affecting households' daily expenses.

Government Policy Adjustments: The Chancellor may reconsider spending priorities, potentially affecting benefits, public services, or taxes.

Long-Term (6 Months - 1 Year & Beyond)
Wage Growth & Employment: If businesses cut back on investment, job growth may slow, impacting incomes.

Housing Market Trends: Higher borrowing costs could cool the property market, making mortgages more expensive.