UK Economy Set for Slowdown as OECD Downgrades Growth Predictions

The UK economy is expected to slow down next year, dealing another blow to Andy Burnham. Despite a stronger-than-expected performance in 2026 amid ongoing conflict in the Middle East, the Organisation for Economic Co-operation and Development (OECD) predicts growth will dip to just 1% in 2027.

The OECD has revised its previous predictions, downgrading the UK's growth for 2027. In contrast, the global watchdog upgraded the UK's 2026 growth forecasts to 1.1%, up from 0.9%, thanks to solid consumer spending.

However, high interest rates and energy price hikes will continue to drag on the economy, with sticky inflation taking longer than expected to fall back to target levels. The report notes that consumers are likely to be supported by newly announced Government support measures, such as the removal of VAT from household energy bills from October.