OECD Downgrades UK Growth Forecast Amid Energy Price Pressures

The Organisation for Economic Co-operation and Development (OECD) has downgraded its UK growth forecast for 2027, predicting that economic growth will slow next year after a stronger-than-expected performance in 2026.

According to the OECD, the UK economy is expected to grow by 1.1% this year, an upgrade from a previous estimate of 0.9%, due to solid domestic demand and government support measures such as the removal of VAT on household energy bills.

However, growth is still expected to be weaker than last year's 1.4% and will likely dip slightly in 2027, with recent increases in energy prices and higher policy rates dragging on activity across Europe.

Inflation is also expected to slow down next year, from a predicted 3.75% this year to 2.6%, but at a slower pace than previously expected.