The Organisation for Economic Cooperation and Development (OECD) has published its annual assessment of the U.K. economy, predicting that it will be the worst performing economy in the G7 group next year. This is due to high interest rates and restrictive fiscal policy, which are expected to hamper medium to long-term economic growth. The OECD lowered its growth outlook for GDP to 0.4 percent this year and 1 percent in 2025, a decrease from its previous prediction of 0.7 percent and 1.2 percent, respectively, in March.
The new predictions indicate that the U.K. will be the slowest growing economy in the G7 group of countries next year, and the second slowest this year, following Germany. These projections highlight the challenges facing the U.K. economy and the need for policy changes to stimulate growth and improve economic performance in the coming years.
According to the OECD’s report, high interest rates are making borrowing more expensive for businesses and households, leading to reduced investment and spending. Additionally, restrictive fiscal policy is limiting government spending on infrastructure projects that could boost economic growth.
The report also notes that Brexit uncertainty continues to weigh on business confidence and investment decisions, which is further exacerbating economic challenges in the country.
In summary, while some may view Brexit as a political issue, it has far-reaching consequences for economic growth and stability in the U.K., as evidenced by these latest predictions from the OECD.
