OECD Cuts UK Growth Forecast to Just 1 Per Cent Amid Sluggish Expansion

The UK economy is facing another year of sluggish growth, according to the Organisation for Economic Co-operation and Development (OECD). The organisation has downgraded its forecast for UK economic growth in 2027 to just 1 per cent, from an initial estimate of 1.1 per cent.

This news comes as a fresh blow to Prime Minister Andy Burnham's Labour Government, which is already grappling with high government borrowing costs and stubborn inflation. The OECD predicts that the Bank of England will need to cut interest rates next year to support the struggling economy, reducing the Bank Rate from 3.75 per cent to 3.5 per cent.

The OECD has raised its estimate for UK growth this year from 0.9 per cent to around 1.1 per cent, but has become gloomier about what follows, cutting its 2027 forecast by 0.1 percentage points. The organisation warns that expensive borrowing makes controlling spending and improving public sector efficiency increasingly important.