Wed, 26 Nov 2025

Wed, 26 Nov 2025 UK growth forecasts lowered from next year

Downgrades to productivity means the economy is set to grow at an annual rate of 1.5% on average over the next five years.
The UK economy's growth rate has been downgraded by the Office for Budget Responsibility (OBR) due to lower productivity growth and uncertainty caused by global conflicts and trade issues.
* The OBR predicts 1.5% growth this year, higher than its previous estimate of 1%, but lower growth estimates for the next four years: 1.4% in 2026 and 1.5% each year from 2027-2030.
* Lower productivity growth is cited as the main reason for the weaker forecast.
* Public spending will increase over the next five years, but tax rises will put total take at an all-time high by the end of the parliament.
* The government has been warned that tax burden on the economy will hit record levels by 2029-30, with an increase of £26bn.
* Chancellor Rachel Reeves said the government had "beaten" this year's growth forecast and would continue to grow the economy through investment in public services.
* However, the OBR pointed out that factors driving economic growth may be beyond the government's control, such as the impact of new technologies on productivity.
* The watchdog also noted that expected economic rebounds following recent shocks have not materialized, leading to a downgrade in its forecast.
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