Tue, 23 Sep 2025

Tue, 23 Sep 2025 UK forecast to have highest inflation among richest nations

The influential policy group lifts its forecast for UK inflation, saying it will be 3.5% in 2025.
The UK economy is expected to slow next year, with growth predicted to drop to 1%, according to a report by the Organization for Economic Co-operation and Development (OECD). Higher food costs are cited as a factor contributing to the forecasted inflation rate of 3.5% in 2025, which is higher than the OECD's previous estimate of 3.1%. The rate is expected to fall to 2.7% in 2026 but would still be the second-highest in the G7. The UK's growth in the first half of the year was faster than forecast, according to Chancellor Rachel Reeves. However, she acknowledged there is more work to do to build an economy that benefits working people. Shadow Chancellor Sir Mel Stride accused Labour of putting Britain on a "high tax, high inflation, low growth doom loop". The OECD also raised its global growth forecast for 2025 to 3.2% from 2.9%, citing resilience in the first half of the year due to increased trade and investment. However, it warned that growth will slow noticeably in the second half of this year as the impact of higher tariffs is felt. US tariffs on imported goods have risen significantly since May, with the effective rate hitting a 93-year high. The OECD said hundreds of millions of people came out of poverty due to trade growth and open markets are usually beneficial for business and technological development.
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