OECD Warns UK Growth Will Slow as Energy Prices Bite

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

The OECD expects the UK economy to have grown by 1.1% this year, an upgrade from their previous estimate of 0.9%, driven by solid domestic demand and government support measures such as the removal of VAT from household energy bills.

However, growth is expected to dip slightly next year, moderating globally due to recent increases in energy prices and higher policy rates.

Inflation is also expected to be lower than previously forecast this year, at 3.1%, but will take longer than expected to fall back to target levels, reaching 2.6% next year according to the OECD.