OECD Downgrades UK Growth Forecast Amid Ongoing Economic Pressures
UK economic growth is expected to slow down in 2027, according to the Organisation for Economic Co-operation and Development (OECD). The forecast predicts a dip to just 1% next year, down from previous predictions. This comes despite a stronger-than-expected performance in 2026 amid ongoing conflict in the Middle East.
The OECD expects UK growth to slow due to high interest rates and energy price hikes that will drag on the economy. While 2026 growth forecasts were upgraded slightly to 1.1%, up from 0.9%, thanks to 'solid' consumer spending, the global watchdog warned that sticky inflation will take longer than expected to fall back to target levels.
UK consumer price inflation is on track to hit 3.1% for this year, which is significantly lower than the previous prediction of 3.6%. The Bank of England predicts that inflation will lift to 3.75% by the end of this year and peak at around 4% in early 2027.
Andrew Griffith MP, Shadow Chancellor, said: 'The OECD have downgraded the UK's growth for 2027 to just a third of the average growth rate of the G20.' Treasury minister Emma Reynolds countered that 'despite unprecedented pressures and conflict in both the Middle East and in Europe, the UK economy is showing strong resilience.'