The Organisation for Economic Cooperation and Development (OECD) has revised its forecasts for the U.K.’s economic growth, predicting that it will be the worst-performing G7 economy next year. This assessment is based on high interest rates and restrictive fiscal policies that are expected to hinder medium to long-term economic growth.
According to the OECD’s annual assessment published on Thursday, the U.K.’s GDP growth forecast for this year was revised from 0.7 percent to 0.4 percent, and from 1.2 percent to 1 percent for 2025, respectively. These forecasts indicate that the U.K.’s economic performance is likely to be the slowest among the G7 countries next year and ranks as the second worst for this year, just behind Germany.
The impact of high interest rates and tight fiscal policies is expected to weigh heavily on the U.K.’s economic performance in the coming years, with experts warning that a recession may be possible if these policies are not adjusted in time.
Overall, these predictions suggest that the U.K.’s economy is facing significant challenges in terms of growth and sustainability, with high interest rates and restrictive fiscal policies being major factors contributing to this downturn.