The Organisation for Economic Cooperation and Development (OECD) has upgraded the UK’s growth forecast for this year, ranking Britain joint second among the G7 countries. The UK’s economic growth is described as robust, with an upgraded forecast of 1.1% for 2024. However, the country is still expected to have the highest inflation within the G7.
The global economy is said to be “turning a corner”, with lower inflation and central bank cuts in borrowing costs supporting ongoing momentum in most major economies. The OECD’s chief economist, Álvaro Pereira, noted the surprising strength of the UK’s recovery earlier this year, emphasizing the need for fiscal prudence without introducing draconian austerity measures.
While global trade is rebounding and real incomes are growing due to weaker inflation, the rising costs in container shipping and food prices are affecting consumer spending. The OECD is concerned about governments increasing borrowing to reduce spending deficits when interest rates are high, warning that high public debts could harm efforts to boost growth and limit resources for future economic crises.
UK Chancellor, Rachel Reeves, welcomed the faster economic growth figures but stressed that there is more work to be done. The upcoming budget will focus on fixing foundations to deliver on the promise of change and rebuild Britain. The OECD’s positive outlook and concerns highlight the need for careful economic management to sustain recovery and growth amidst global challenges.
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