- Thursday, May 16, 2024
The OECD forecasts showed Britain’s annual rate of consumer price growth was likely to be the highest among G7 countries
By: Shajil Kumar
Britain will suffer some of the lowest rates of economic growth and highest inflation among Group of Seven countries this year and next, forecasts from the Organisation of Economic Co-operation and Development suggested on Thursday.
The OECD cut this year’s growth forecast for the British economy to 0.4% from 0.7% it predicted in February. Only Germany is expected to perform worse among G7 advanced economies, which also include Canada, France, Italy, Japan and the United States.
Growth in 2025 was expected to recover to just 1.0 per cent, compared with the OECD’s previous forecast of 1.2 per cent, putting Britain at the bottom of the G7.
The OECD forecasts showed Britain’s annual rate of consumer price growth was likely to be the highest among G7 countries with comparable measures of inflation, both this year and next.
The forecasts are awkward for Prime Minister Rishi Sunak, whose Conservative Party is lagging badly behind the opposition Labour Party in opinion polls ahead of a national election that is likely to come later this year.
He has told voters it would be unwise to ditch his party just as his economic plan is starting to work.
“This forecast is not particularly surprising given our priority for the last year has been to tackle inflation with higher interest rates,” finance minister Jeremy Hunt said in response to the OECD forecast. He pointed to more optimistic forecasts from the International Monetary Fund.
The OECD said it should be a priority for Britain’s government to rebuild its fiscal buffers, adding this necessitated “credible” budget plans.
Economists warned in March that the public spending assumptions underpinning Hunt’s budget published in March were unrealistic. (Reuters)
