Tue, 03 Jun 2025

Tue, 03 Jun 2025 Debt and trade issues weaken UK growth, OECD says

The policy group lowers its UK economy forecast due to trade barriers and Britain's "very thin" financial buffer.

* The OECD has cut its forecast for UK economic growth this year to 1.3% due to US tariff barriers and high interest payments on government debt.
* The think tank also reduced its global growth forecast to 2.9%, down from 3.1%, citing trade tensions as a major factor.
* The UK's "very thin" buffer in public finances is seen as a particular issue, with the OECD calling for Chancellor Rachel Reeves to boost tax take and cut spending.
* Reeves has promised to go further and faster to increase funding in people's pockets through her Spending Review next week.
* However, the OECD suggests that targeted spending cuts and tax increases are needed to improve the UK's public finances.
* The group also recommends closing tax loopholes and re-evaluating council tax bands based on updated property values.
* Worldwide growth is expected to slow due to trade tensions, with almost no exception, according to the OECD.
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