OECD predicts weaker UK growth in G7

OECD predicts weaker UK growth in G7

The G 7 includes the US, UK, Canada, France, Germany, Italy and Japan. Growth is expected to be weaker in most countries, but only Germany and the UK will contract, the OECD predicts.

The UK Office for Budget Responsibility OBR predicted last week that the UK would shrink by 1.4% next year, although it also predicted stronger growth of 1.3% in 2024. The OBR said that would lead to the biggest drop in living standards on record.

That would require the Bank of England to raise interest rates further and add to the cost of servicing debts.

Labour's shadow secretary to the Treasury Pat McFadden said that we are expected to be the only OECD economy that will be smaller in 2024 than in 2019.

The OECD said that the UK's inflation, which hit a 41 year high of 11.1% in October, is likely to peak at the end of the year but is above 9% in early 2023 and will slow to 4.5% by the end of next year.

In October, the cost of paying for help with energy bills showed up on the government's accounts as households began receiving the first tranche of a 400 subsidy, and the lower 2,500 energy price cap came into effect.