A World Divided: G7 Growth Led by US and UK, But Inflation Splits the Pack

The latest global economic outlook reveals a world divided, with the G7’s growth prospects being led by the US and the UK, while inflation forecasts split the pack. The UK is projected to be the second fastest-growing economy in the group this year, with its GDP forecast upgraded to 1.3%.
However, this growth leadership comes at a price. The same report forecasts that the UK will suffer from the highest inflation rate among all G7 nations in both 20_25_ and 20_26_. This sharp divide between its growth performance and its inflation problem highlights a significant economic imbalance.
The overall global picture is similarly divided between a resilient present and a “dim” future. The world’s growth forecast for this year has been lifted to 3.2%, partly because the negative effects of US tariffs have been slower to appear than expected. However, these effects are still anticipated to hit business investment hard.
The report also highlights policy divisions that are creating economic risks. Restrictive immigration policies in some countries, notably the US, are seen as a direct threat to their own growth potential and a source of future inflation.
Furthermore, a division is noted between the real economy and “stretched” financial markets. The report warns of a potential “correction” if the market’s optimistic assessment of AI technology diverges too far from reality, creating another source of global instability.