The UK economy is forecast to grow by more than previously expected this year before higher energy prices and interest rates hit growth in 2027, the International Monetary Fund (IMF) has said.
The organisation's latest report, which is closely watched by the government, said the UK economy would expand by 1.3% in 2026, up from the 1% it predicted in July, before slowing in 2027.
Economies across the world have proved more resilient to the energy price shock caused by the US-Iran war, the IMF said, but it warned the economic fallout from the conflict remained "highly uncertain".
Chancellor John Healey said the government would look to "provide some breathing space" for households in the Budget.
Healey is making the final preparations to Andy Burnham's new-look government's tax and spending plans, which will be announced on 28 October.