UK Growth to Slow Down Next Year Despite Stronger-Than-Expected Performance in 2026

The UK economy is expected to slow down next year despite a stronger-than-expected performance in 2026, according to recent forecasts. The Organisation for Economic Co-operation and Development (OECD) reported that global growth was resilient during 2026, but rising energy prices linked to the Middle East conflict will cause more inflation in the near term.

The UK's economic growth is set to be 1.1% this year, an upgrade from a previous estimate of 0.9%, but growth is still expected to be weaker than last year's 1.4%. The economy is likely to dip slightly next year, with growth moderating globally.

UK consumer price inflation is on track to hit 3.1% for this year, significantly lower than the previous prediction of 3.6%, but still the second-fastest increase in the G7. Inflation lifted to a five-month high of 3.1% last month, with the Bank of England predicting that it will lift to 3.75% by the end of this year and peak at around 4% in early 2027.

Treasury minister Emma Reynolds said: 'Despite unprecedented pressures and conflict in both the Middle East and in Europe, the UK economy is showing strong resilience.'