Amid global uncertainty, the UK economy needs a vote of confidence from the IMF at its annual meeting this week, writes Chris Hayward
This week’s International Monetary Fund (IMF) gathering presents a high-stakes moment for the UK economy. As global leaders convene to reassess international and domestic trajectories, the UK faces a litmus test of its economic strategy and resilience. In July, the IMF upgraded its UK growth forecast for 2025 to 1.2 per cent, citing early signs of recovery and endorsing the government’s fiscal approach. Yet, as the Chancellor rightly notes, we remain exposed to global headwinds, tariffs, inflationary pressures and geopolitical uncertainty, which continue to loom large.
What the UK needs now are bold signals that growth can accelerate, not merely stabilise. A strong forecast would send a powerful message to markets and investors. Recent data showing record withdrawals from UK equity funds in the third quarter of 2025 is troubling. To reverse this trend, we must unlock investment at pace. A competitive tax regime and targeted incentives for firms to invest in the UK are essential to shift the dial.
In this context, last week’s Prime Ministerial visit to India, which I was proud to join, takes on real significance. The UK sent its largest-ever delegation, including more than 125 leaders from business, academia and culture, underscoring the strategic importance of the relationship. I was there to champion the City of London as a destination for Indian firms, and to engage with leading figures from what is now a major economic power.
The potential is immense. Bilateral trade is projected to grow by £25.5bn annually, with a corresponding £4.8bn boost to UK GDP. Already, the visit has unlocked over £1bn in investment creating nearly 7,000 jobs across the UK spanning engineering, technology and the creative industries.
UK needs a vote of confidence from the IMF
Yet, the trade deal is just the beginning. What could truly transform the UK-India economic corridor is the creation of a new investment hub, which I’m spearheading alongside the Treasury and the Office for Investment. This dedicated platform will serve as a gateway to India, and other countries looking to invest in UK infrastructure, tech, green energy and manufacturing. It will also support UK firms expanding into India’s dynamic market, creating jobs and deepening bilateral ties.
Taken together, the IMF’s endorsement, the India trade mission and the investment hub represent a confluence of opportunity. If the IMF meeting this week signals confidence in the UK’s strategy, and if the India visit translates into further executed deals and investor interest, we could see a meaningful shift in growth.
With the upcoming Budget, businesses will be watching closely for signs of stability, particularly in tax policy. The Chancellor must avoid further tax rises that risk dampening sentiment and suppressing the UK’s economic dynamism. Instead, this moment calls for a renewed focus on productivity-enhancing reforms: in skills, digital infrastructure, planning and innovation. These are the strategic levers that can unlock long-term competitiveness and prosperity.
If aligned effectively, such reforms can help reposition the UK as a nimble, outward-looking economy, ready to seize global opportunities. The City stands ready to play its part, turning ambition into capital, capital into jobs and trade into sustainable growth.
This is a pivotal moment. The UK must seize it.
Chris Hayward is the policy chairman of the City of London Corporation