OECD sharply upgrades UK economic growth forecasts
2024.09.25 05:54
LONDON (Reuters) – The OECD sharply upgraded its forecast for British economic growth for this year and 2025 on Wednesday, after previously predicting Britain would have the weakest growth of any Group of Seven country.
The Paris-based Organisation for Economic Cooperation and Development forecasts Britain’s economy will grow by 1.1% in 2024 and 1.2% in 2025, up from previous forecasts of 0.4% and 1.0%, and similar to Bank of England forecasts last month.
The upward revision by the OECD – part of a broader global update to its forecasts – now places Britain’s growth rate close to most other Group of Seven countries this year and next though behind that in the United States.
Britain’s economy grew faster in the first half of 2024 than most forecasters had predicted, prompting upgrades for this year’s growth by other organisations including the BoE.
“Faster economic growth figures are welcomed, but I know there is more to do and that is why economic growth is the number one mission of this government,” finance minister Rachel Reeves said in response to the latest OECD forecasts.
The centre-left Labour Party won a sweeping election victory in July. When it was in opposition at the time of the last OECD forecasts in May, it said they reflected 14 years of economic failure by the Conservative government.
The OECD continued to predict that Britain would have the highest inflation of any G7 country in 2024 and 2025 at an average of 2.7% in 2024 and 2.4% in 2025, little changed from its previous forecast.
British inflation was 2.2% in August, just above the BoE’s 2% target, but the central bank expects it to rise due to big increases in the cost of domestically produced services and the fading effect of last year’s fall in energy costs.
