OECD Downgrades UK 2027 Growth Forecast to 1% Amid Inflation Pressures

The Organisation for Economic Cooperation and Development (OECD) has downgraded its projection for Britain's economic expansion in 2027 to 1%, citing slower growth and higher inflation. This revision reflects a combination of factors, including the Iran war and El Niño weather event, which are expected to drive up food and energy costs.

The OECD raised its estimate for UK annual growth this year to about 1.1% from an earlier projection of 0.9%, while cutting its forecast for the following year by 0.1%. This reduction is larger than the downgrades applied to any other Group of Seven economy except Canada, which is affected by tariffs associated with Donald Trump.

The OECD attributed part of the pressure to the Iran war and El Niño weather event, warning that central banks should be prepared to raise interest rates. The organisation also pointed to rising government borrowing costs, which are at their highest level since 2007-08 in many wealthy countries.