OECD Downgrades UK Growth Forecast to 1% for 2027

The Organisation for Economic Co-operation and Development (OECD) has downgraded its UK growth forecast for 2027, citing a slower-than-expected economic expansion in the face of ongoing global conflicts. According to the OECD, the UK economy is expected to grow by 1.1% this year, surpassing previous estimates of 0.9%. However, growth is likely to moderate next year, with a projected rate of 1%, which is lower than the 1.4% reported last year.

The OECD attributes the slower growth to recent increases in energy prices and higher policy rates, which are expected to drag on activity across Europe. Additionally, UK inflation is forecasted to be below previous estimates this year but will take longer than expected to fall back to target levels. The organisation predicts that inflation will slow to 2.6% next year, which is a shallower drop than previously anticipated.

Mathias Cormann, secretary general of the OECD, emphasized that central banks must act if price pressures sharpen. Meanwhile, Treasury Minister Emma Reynolds stated that the UK economy has shown strong resilience in the face of unprecedented challenges and will continue to adapt to changing circumstances.