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IMF not seeing evidence of wage-price spiral in Britain, Gourinchas says

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Published 04/14/2026, 10:22 AM
Updated 04/14/2026, 10:24 AM
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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."

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