UK Growth Slows Next Year Amid Energy Price Pressures

UK economic growth is set to slow next year, according to new forecasts from the Organisation for Economic Co-operation and Development (OECD). This comes as a blow to Andy Burnham's fiscal ambitions, with growth expected to be weaker than last year's 1.4 per cent.

The OECD predicts UK economic growth will dip slightly next year, following a stronger-than-expected performance in 2026. Despite this, the organisation notes that global growth is resilient in many countries, including the UK, but recent rises in energy prices linked to the war in Iran are likely to cause more inflation in the near term.

UK inflation will be below previous forecasts for this year, coming in at 3.1 per cent, but it will then take longer than expected to fall back to target levels. The OECD expects inflation to slow to 2.6 per cent next year, which is a shallower drop than previously expected.

Treasury minister Emma Reynolds insisted that the UK economy is showing strong resilience despite the war in Iran, and that the government will face these challenges together.