Summary
The OECD says the UK economy will face challenges due to tax increases and spending cuts, which could slow down growth. The UK is expected to see steady but low economic growth and high inflation compared to other major economies. The OECD predicts that in the coming years, growth will slowly improve, with a slight economic boost expected from lower interest rates and improved global trade.
Key Facts
- Tax rises and spending cuts are expected to slow down the UK's economic growth.
- The UK economy is forecast to grow by 1.4% this year, then slow to 1.2% in 2026.
- Inflation in the UK is projected to be 3.5% this year, the highest among the G7 countries.
- UK growth may increase to 1.3% by 2027, after a drop next year.
- The Bank of England is expected to cut interest rates, potentially boosting the economy.
- UK Chancellor Rachel Reeves indicated that her Budget aims to cut inflation and improve households' cost of living.
- The OECD believes careful management of tax and spending is needed due to risks to growth and inflation.
- Global economic growth is forecasted to be 3.2% this year but slow in 2026, with a rebound expected in 2027.
