Tue, 02 Dec 2025

Tue, 02 Dec 2025 Tax rises and tighter spending to hold back UK growth, OECD says

Growth in the UK economy is expected to slow next year, an influential global policy group predicts.

* UK economy growth: + 1.4% this year + 1.2% in 2026 (slowing down) + 1.3% in 2027 (slightly increasing)
* Tax rises and spending cuts will act as a "headwind" to growth, slowing consumption
* UK inflation: + 3.5% this year (unchanged from previous forecast) + easing to 2.5% next year
* Unemployment: + 4.9% in 2026 + 5% in 2027
* Interest rates expected to drop to 3.5%
* UK economy will be the second-fastest growing in the G7 this year, behind the US
* OECD's forecast is less optimistic than the UK government's official forecaster, the Office for Budget Responsibility
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