Published by Global Banking & Finance Review®
Posted on April 14, 2026
1 min readLast updated: April 14, 2026
Add as preferred source on GoogleThe IMF, led by chief economist Pierre‑Olivier Gourinchas, sees no current wage‑price spiral in the UK—slack in the economy is tempering wage pressures—and expects core inflation to edge up modestly to about 2.7% in 2026. Growth has been downgraded sharply amid war‑fuelled energy shocks.
WASHINGTON, April 14 (Reuters) - The International Monetary Fund is not seeing evidence of a wage-price spiral in Britain at the moment, and the Fund anticipates only a small increase in core inflation due to war-driven energy price spikes, IMF chief economist Pierre-Olivier Gourinchas said on Tuesday.
Gourinchas said that core UK inflation is now forecast around 2.7% for 2026, up from 2.2% forecast in January, despite Britain's heavy dependence on gas imports.
"The UK economy still has a negative output gap in our estimate, so there is quite a bit of slack, and that actually is moderating some of the wage pressures," Gourinchas told a news conference. "Now we'll have to see and watch how the increase in energy prices, especially when they get to consumers, whether that translates into a different dynamic."
(Reporting by David Lawder)
The IMF is not seeing evidence of a wage-price spiral in Britain at the moment.
The IMF anticipates only a small increase in core inflation in Britain due to war-driven energy price spikes.
Wage pressures are moderate because the UK economy still has a negative output gap, indicating slack.
Pierre-Olivier Gourinchas is the IMF chief economist cited in the article.
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