The UK's economy is now forecast to grow more this year than previously expected, but the International Monetary Fund (IMF) has warned this is dependent on chancellor Rachel Reeves sticking to her rules on tax and spending.
The IMF, which provides economic performance data and predictions, is forecasting the UK economy to grow 1.2% this year, rising to 1.4% in 2026.
It comes just over a month after the IMF downgraded its predicted UK economic growth from 1.6% to just 1.1%.
Now, the revising that forecast to 1.2% for this year, the IMF has suggested an economic recovery is "under way".
The BBC reports Luc Eyraud, the IMF's UK mission chief, said growth had been "very strong" in the first three months of the year.
Official figures show the economy was boosted by increases in consumer spending and business investment, however, those figures relate to the period before the US imposed import tariffs and UK employer taxes increased in April.
The IMF praised the government's planning reforms and infrastructure investment plans, saying these would increase growth "if properly implemented".
But it added that a "high level of global uncertainty, volatile financial market conditions, and the challenge of containing day-to-day spending" mean the Chancellor Rachel Reeves will face "difficult choices" to balance taxation with spending in the long term.
FTSE 100
The UK's flagship share index, the FTSE 100, was up 21 points at 8,796 shortly after opening this morning.
Brent crude oil futures were up 0.22% at $63.80 a barrel.
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