OECD urges UK to prioritize investment over debt focus

The Organisation for Economic Co-operation and Development (OECD) has provided guidance to UK Chancellor Rachel Reeves, emphasizing the need for increased investment in the country. This recommendation comes as the OECD released new forecasts highlighting the importance of addressing years of under-investment in the UK economy. Alvaro Pereira, the OECD's chief economist, pointed out that the UK has experienced sub-par investment levels in recent years, which has hindered economic growth. The OECD's call for prioritizing investment is particularly significant as it contrasts with the general advice given to other member countries, which is focused on fiscal consolidation and austerity measures. The organization believes that for the UK to achieve stronger economic growth, it is essential to shift the focus from strict fiscal rules to fostering an environment conducive to investment. This shift in focus is crucial for the Labour government as it prepares for its maiden budget, aiming to stimulate the economy and address long-standing issues of under-investment.