Summary
The UK is expected to face the largest slowdown in economic growth among major economies due to the ongoing conflict involving Iran. The OECD predicts the UK's growth will be 0.7% this year, with inflation rising to 4%. The prolonged conflict could cause global energy shortages and higher food prices.
Key Facts
- The OECD forecasts the UK's economic growth at 0.7% this year, down from 1.2%.
- UK inflation is predicted to reach 4% this year, up from a previous estimate of 2.5%.
- The OECD warns a prolonged conflict could lead to significant global energy shortages.
- Higher fertilizer prices may affect crop yields, causing food prices to rise.
- Worldwide, the OECD's growth forecast remains at 2.9%, but G20 inflation is raised to 4%.
- The UK is predicted to have higher inflation than most G7 countries, only the US is higher.
- The Office for Budget Responsibility previously cut UK growth expectations to 1.1%.
- UK retailer Next warns of potential price increases if the conflict continues, due to added costs.
