The IMF has warned that British households face higher-than-expected inflation and slowing economic growth, with the conflict in the Middle East pushing up energy and food prices.

The IMF warned that UK inflation will hit 3.3% in 2026 and 2.8% in 2027, higher than previously forecast, while UK GDP grows 1.3% this year before slowing to 1.2% next year, with Prime Minister Andy Burnham's government and Chancellor John Healey facing budget pressure ahead of the October 28 Budget.