Rachel Reeves’s insistence that the UK economy is “turning a corner” has been branded “desperate and delusional” after a new report showed the country lagging behind some of its G7 counterparts. The International Monetary Fund’s (IMF) growth predictions for the UK in 2026 and 2027 remained unchanged from previous forecasts in its latest outlook report – at 1.3% and 1.5% respectively. While the figures put Britain on track for greater growth than countries including Italy, France and Japan, it continues to trail behind the US and Canada in terms of GDP output. The UK and Italy were also the only G7 countries not given a growth upgrade for 2026.

Chancellor Rachel Reeves focused on the report’s confirmation that Britain’s economy grew 0.1% more than expected last year, however, exceeding the IMF’s prediction of 1.3% to reach 1.4%. She hailed the news as a testament to “the stability we have brought to the economy and the investment we’ve unlocked”, leading critics to brand her optimism “delusional”.

“After years of decline, this is the year the country turns a corner,” Ms Reeves said, in response to the new report.

“The IMF has upgraded our growth for the third time in a row since April 2025, putting us on course to be the fastest growing G7 economy this year and next.

“Thanks to the stability have brought to the economy and the investment we’ve unlocked, we continue to defy the forecasts and ease the cost of living for families by bringing down bills.”

Shadow chancellor Sir Mel Stride hit back at the triumphant comments, however, insisting that “the economy is flatlining”.

“A 0.1% uptick is not a triumph and the fact that Rachel Reeves is celebrating it shows how desperate she has become,” he said.

Conservative business spokesperson Andrew Griffith also had harsh words for the Chancellor, suggesting she must be “delusional if she thinks there is anything to celebrate”.

“The IMF confirm that on her watch, UK growth in 2026 and 2027 will be slower than the US, slower than Canada and even slower than most developing countries,” he told the This is Money.

“Brits are getting poorer as a result. In fact, the only countries that we beat are the snail-like EU countries which makes it all the odder that Labour want to tie us more closely to them.”

IMF forecasts also suggest that the UK’s inflation – currently the highest in the G7 – will fall to its 2% target by the end of this year, but only because “the weakening labour market continues to exert downward pressure on wage growth”.

While it made no mention of US President Donald Trump‘s threat to sanction countries opposed to his takeover of Greenland, the report did warn that “trade tensions could flare up, prolonging uncertainty and weighing more heavily on activity”, potentially causing economic turbulence in the coming months.