Chancellor Kwasi Kwarteng's tax-cutting mini-Budget will help Britain to be the fastest-growing major economy this year, but soaring inflation in this country is not going away any time soon.

The International Monetary Fund said yesterday that UK economic growth will outpace the rest of the G7 in 2022.

Tax cuts announced by the Chancellor are expected to lift growth even higher than the IMF current forecast of 3.6%.

It comes after the IMF urged Mr Kwarteng to change course on his plans to revive the economy, saying it risked stoking inflation and pushing up inequality.

The IMF yesterday repeated these concerns, even as it admitted the plan would push up growth.

Inflation in Britain was running at 9.9% in August - nearly five times the Bank of England's 2% target.

Worst inflation rate

The IMF expects inflation in this country to remain at 9% next year - the worst rate for any major advanced economy - and said Mr Kwarteng's tax policies will push up the cost of Government borrowing unless he changes course.

Pierre-Olivier Gourinchas, the IMF's chief economist, compared the clash between growth-enhancing tax cuts and rising interest rates to Mr Kwarteng and the Bank of England Governor Andrew Bailey fighting for control of a vehicle.

He told the Telegraph: "It's like having a car with two people in the front and each of them...is trying to steer it in a different direction. That's not that's not going to work very well."

The IMF expects UK inflation to average 9% next year, even as investors bet on interest rates climbing well above 5% in a blow to 1.8million households due to roll off their fixed-rate mortgages. By comparison, inflation is forecast to average 3.5% in the US and 5.7% in the euro area in 2023.

The Washington-based IMF's prediction of 3.6% growth in Britain is 0.4% higher than its forecast in July. It compares with growth forecasts this year of 1.6% for the US, 1.5% for Germany and 2.5% for France.

The UK is only projected to expand by 0.3% in 2023 - one of the lowest rates in the G7.

Grocery bills up

Meanwhile, the average annual grocery bill across Great Britain is forecast to rise by £643 this year, according to research firm Kantar.

That means shoppers could be paying on average an extra £12 a week for food and other groceries.

Food prices have soared this year, with the war in Ukraine helping to drive up prices at supermarket tills.

said Fraser McKevitt, head of retail and consumer insight at Kantar told the BBC: "The cost-of-living crisis is still hitting people hard at the checkouts and this latest data will make tough reading for many.

"Based on our numbers, the average household is facing a £643 jump in their annual grocery bill to £5,265 if they continue to buy the same items. Taking that at a basket level, that's an extra £3.04 on top of the cost of the average shopping trip last year which was £21.89."

However, the firm also said that people are looking for ways to manage their budgets to avoid paying more for their shopping, amid soaring living costs.

Sales of supermarket own-label products continue to grow as customers switch from branded products.

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