OECD Downgrades UK Growth Forecast Amid Energy Price Pressures

The Organisation for Economic Co-operation and Development (OECD) has downgraded its forecast for UK economic growth in 2027, citing higher energy prices, interest rates, and global uncertainty. The OECD now expects the economy to expand by just 1 per cent next year, a decrease from its previous prediction of 1.1 per cent.

The Paris-based organisation also expects the Bank of England to cut interest rates in 2027, predicting Bank Rate will fall from 3.75 per cent to 3.5 per cent as inflationary pressures begin to ease. However, UK inflation is forecast to remain above target at 2.6 per cent in 2027.

The OECD's global outlook highlights the growing importance of artificial intelligence to the US and world economies but warns that the investment boom itself carries risks. OECD Secretary-General Mathias Cormann warned that central banks 'must act if price pressures sharpen.'