OECD Downgrades UK Growth Forecast to 1% Amid Inflation and Interest Rate Fears

The Organisation for Economic Cooperation and Development (OECD) has downgraded its forecast for Britain's economic growth in 2027 to 1%, citing higher inflation and interest rates.

This comes as Prime Minister Andy Burnham prepares for a difficult Budget, which economists warn will require up to £10bn of tax increases or spending cuts. The OECD estimates that the UK's annual growth this year will be around 1.1%, up from earlier predictions of 0.9%.

The downgrade is equal to or more than that meted out to any other G7 economy except Canada, which is under siege from US tariffs. The OECD attributes the slower growth to higher food and energy costs, fueled by the Iran war and El Niño weather event.