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OECD Sees UK Growth Slowing in 2027 After Stronger 2026
The OECD said stronger domestic demand will lift UK growth to 1.1% in 2026, but higher fuel prices should slow expansion in 2027.
The Organisation for Economic Co-operation and Development upgraded growth forecasts to 1.1% for 2026 but expects a slowdown to 1% next year amid global economic headwinds.
Consumer price inflation reached 3.1% last month, with the Bank predicting a peak of around 4% in early 2027 as higher energy prices and "higher policy rate" drag on activity.
Treasury minister Emma Reynolds noted the economy is showing "strong resilience" despite conflict in the Middle East and Europe, with families to "be supported by newly announced government support measures."
The growth outlook presents challenges as Chancellor John Healey prepares his first Budget at the end of October, amid concerns over Andy Burnham's broader economic ambitions.
Global economic risks remain elevated due to ongoing conflict in Iran and weather-related shocks, which could hit farmers and push up food prices next year.