• The IMF said falling inflation could mean as many as seven interest rate cuts 

Rishi Sunak hailed Britain’s economic recovery today, declaring the ‘shocks of the past are squarely in the rear view mirror’.

With figures tomorrow expected to show a further fall in inflation, he said that with ‘every week’ families would start to feel the benefits of a growing economy.

‘The economy really does have momentum now, and I think you can see that in the numbers,’ the Prime Minister added. His comments came as the International Monetary Fund up-graded its outlook for the UK, and said the Government’s policies were paying off.

The IMF said falling inflation could mean as many as seven interest rate cuts by the end of next year, with Chancellor Jeremy Hunt saying the report showed the economy had ‘turned a corner’ and – in a dig at Labour – that it should banish ‘unjustified pessimism’ about Britain’s prospects.

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In an exclusive interview with the Mail in Vienna, where Mr Sunak held talks with Austrian chancellor Karl Nehammer today, he urged voters to ‘stick with the plan’.

‘We’ve already had stats that show the UK economy is heading back to normal,’ the PM said, pointing to figures which show Britain’s economy was the fastest-growing in the G7, alongside Canada, in the first quarter of 2024.

‘Inflation has come down to just over 3 per cent from the 11 per cent that it was when I took this job. That is proof the plan is working, the shocks of the past are squarely in the rear view mirror. And I’d say to people, ‘stick with the plan’ because the plan is working and hopefully we’ll get further confirmation of that.’

Inflation figures published tomorrow are expected to show it falling from 3.2 per cent in March to as low as 2.1 per cent in April – close to the Bank of England’s 2 per cent target.

That would be the lowest level since July 2021 and leave inflation in Britain below that in the US and the eurozone for the first time in two years.

However, Andrew Sentance, a former Bank of England rate-setter, has cautioned that he expects a much more modest fall to 2.7 per cent.

Mr Sunak said that getting inflation back to ‘a more normal level’ would be ‘very welcome for people’.

He added: ‘I know that not everyone is feeling the benefits of that immediately, but I’m confident that with every week, every month that passes, that people will start to feel the benefit.’

Last week gross domestic product (GDP) showed the economy grew by a better than expected 0.6 per cent in the first quarter of 2024. That bounce-back prompted the IMF to hike its forecast for GDP growth for this year from 0.5 to 0.7 per cent, as it published its annual health check on the economy today.

Kristalina Georgieva, the IMF’s managing director, said the actions of Mr Sunak and Mr Hunt together with the Bank of England were ‘paying off’. ‘The economy is growing, inflation is falling, and a soft landing is in sight,’ she said.

A ‘soft landing’ is when inflation is brought under control without damaging growth too much. However the IMF also warned the Government to address a £30billion black hole in public finances – equivalent to 1 per cent of GDP.

If it does not make up the shortfall it risks missing targets to bring down debt, the fund said.

The Chancellor said the IMF forecast that the UK economy will grow faster than any other large European country over the next six years means ‘it is time to shake off some of the unjustified pessimism about our prospects’.