ECONOMISTS have forecast that US tariff plans may stymie the Labour government’s plan for Britain’s economy to grow.

Chancellor Rachel Reeves has made growing the economy a key priority to help fund future spending plans.

But trade tensions linked to US tariff plans will reduce economic growth next year, according to the International Monetary Fund (IMF).

The IMF has upgraded its growth forecast for the UK economy this year, claiming an “economic recovery is underway” with gross domestic product (GDP) set to increase by 1.2 per cent this year.

The organisation also held to its prediction that Britain’s economy will grow by 1.4 per cent in 2026.

It highlighted a greater risk that growth could be weaker than expected, due to the potential that global trade uncertainty will disrupt supply chains and weaken private investment.

Chancellor Reeves welcomed the IMF forecast and said: “The UK was the fastest growing economy in the G7 for the first three months of this year.”