OECD cuts UK 2027 growth forecast to 1% due to Middle East conflict and higher energy prices

The Organisation for Economic Co-operation and Development (OECD) has released new forecasts for the UK economy. It upgraded the UK's growth for 2026 to 1.1% from 0.9%, but downgraded the 2027 forecast to 1% from 1.1%. The downgrade is due to higher energy prices from the Middle East conflict. The OECD also cut its UK inflation forecast for 2026 to 3.1% from 3.6%, but expects inflation to fall more slowly in 2027. The UK is set to grow by 1.1% in 2026, supported by government measures like removing VAT on energy bills.