Chancellor Rachel Reeves is heading to Washington DC for high-level economic discussions at the International Monetary Fund (IMF) and World Bank, despite fresh warnings about Britain’s inflation outlook.

The IMF has forecast that UK inflation will climb to the highest levels among G7 nations during 2025 and 2026.

The Chancellor plans to use the meetings to present Britain as a stable destination for international investment and business operations.

Her visit coincides with the IMF’s latest economic assessment, which projects UK price inflation will rise more steeply than anticipated in its earlier July predictions.

During her Washington visit, Reeves intends to emphasise Britain’s dedication to maintaining strict fiscal discipline as the cornerstone for economic expansion and attracting global capital.

The Chancellor will showcase the Government’s National Wealth Fund as evidence of measures implemented to establish a business-friendly climate in the UK.

“Our Plan for Change is delivering national renewal built on the rock of economic stability the foundation for more security, more respect and more opportunity for every part of the UK,” Ms Reeves said before her departure

.”In Washington I will showcase Britain’s commitment to fiscal responsibility while creating the conditions to boost productivity, attract investment and secure our place as a strong and credible partner in a stable global economy.”

The IMF’s revised projections indicate British inflation will reach an average of 3.4 per cent during 2025, up from its earlier estimate of 3.2 per cent.

However, inflation is predicted to moderate to 2.5 per cent in the following year, though this remains above the 2.3 per cent previously forecast.

These figures position UK households to experience the steepest price increases amongst all G7 advanced economies throughout the two-year timeframe.

The upward revisions come as political leaders and central bank governors convene in the American capital.

Britain’s economy is projected to expand by 1.3 per cent this year, benefiting from robust performance in the opening six months.

The growth figure marks an improvement from the IMF’s prior 1.2 per cent forecast, though next year’s outlook has been trimmed from 1.4 per cent to 1.3 per cent as international trade tensions pose risks to numerous economies.

Furthermore, the IMF noted that Britain will achieve the second-fastest gross domestic product (GDP) growth rate in the G7 this year, trailing only the United States.

Beyond the formal economic discussions, the Chancellor’s itinerary includes participation in a Ukraine investment roundtable aimed at generating financial support for the conflict-affected country.

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She has also arranged meetings with American financial institutions to promote UK investment opportunities.

Professor Joe Nellis, an economic adviser at accountancy firm MHA, the accountancy and advisory firm, said: “Global trade frictions, rising borrowing costs, and weak productivity continue to cloud the outlook for the UK economy, but this does not make the UK an outlier — global growth is forecast to slowly decline from 3.3 per cent in 2024, to 3.2 per cent in 2025 and 3.1 per cent in 2026.

“The IMF emphasises that the UK’s financial position is stable but remains stretched. Higher debt-servicing costs and slower revenue growth leave little room for fiscal manoeuvre. Any fiscal easing in the Autumn Budget will need to be carefully targeted to avoid reigniting inflation or undermining market confidence.

“Overall, the IMF message is clear: the UK economy is improving but still vulnerable. The Budget must balance credibility with compassion — supporting growth and investment while keeping a firm grip on borrowing and inflation expectations.”