UK's economic growth forecasted at 1.1% by OECD

The Organisation for Economic Co-operation and Development (OECD) has revised its forecast for the UK economy, predicting a growth rate of 1.1% for 2024, aligning it with Canada and France. This marks a significant improvement from previous estimates, where the UK was projected to have the lowest growth among G7 nations. Chancellor Rachel Reeves expressed optimism about these figures, emphasizing the need for a balanced approach in the upcoming Budget to foster investment while acknowledging potential economic challenges ahead. Despite the positive growth outlook, the OECD cautioned that significant risks remain, including geopolitical tensions and trade issues that could hinder investment and increase import costs. The think tank's report highlights that while many countries, including the UK, are experiencing relatively robust economic conditions, the potential for external shocks looms large. Looking ahead, the OECD anticipates that the UK will experience joint-fourth fastest growth in 2025 at 1.2%, trailing behind other major economies. Additionally, consumer prices in the UK are expected to rise at a faster rate than other G7 countries, with projections of 2.7% this year and 2.4% next year. This inflationary pressure poses further challenges for the UK economy. The OECD's economic estimates serve as a guide for businesses and governments, influencing investment planning and policy decisions. The organization advocates for a careful reduction in interest rates and decisive actions to manage debt levels, emphasizing the importance of stabilizing government spending and revenue generation to prepare for future economic uncertainties.