UK leapfrogs Japan, Italy and Germany in OECD growth forecast for 2024

The UK system has overtaken respective G7 countries connected economical maturation forecasts successful caller months, but is inactive acceptable to person the highest ostentation of the bloc, according to economists.

The Organisation for Economic Co-operation and Development (OECD) has placed the UK associated 2nd successful its economical maturation forecasts for the remainder of 2024.

The prediction of 1.1% maturation for the full of this twelvemonth puts the UK alongside Canada and France but down the US.

Last clip the OECD enactment retired a forecast, successful May, it had the UK astatine the bottommost of the heap successful the informal bloc of 7 countries, which besides includes Japan, Italy and Germany.

Its prediction of 2.7% ostentation for this twelvemonth means the UK is inactive the state successful the G7 with the fastest-rising prices.

The OECD wrote successful its interim study connected the satellite system that planetary economical maturation “has remained resilient and ostentation has continued to moderate”.

It added: “Recent enactment indicators suggest ongoing momentum, particularly successful services sectors. Real wage maturation is present supporting household incomes and spending, though purchasing powerfulness has yet to afloat instrumentality to pre-pandemic levels successful galore countries.

“Global commercialized is recovering faster than expected, but shipping costs stay elevated and export orders person precocious moderated.”

But it added: “Significant risks remain. Persisting geopolitical and commercialized tensions could progressively harm concern and rise import prices.”

It comes aft the OECD said past week that the UK’s economical outlook is “gradually” improving, upgrading its forecasts for UK maturation to 1.1% successful 2024 and 1.2% successful 2025.

The OECD urged Chancellor Rachel Reeves to not conscionable rise taxes but look astatine wider reforms of the taxation strategy up of the Budget successful October.

While the UK has climbed respective spots successful forecasts for this twelvemonth versus the OECD’s past forecast successful May, it is lone acceptable to bask joint-fourth fastest maturation successful 2025, up of lone Germany and Italy.

UK ostentation is connected people to stay astatine 2.4% for 2025, rising astatine the fastest complaint successful the G7.

Ms Reeves said: “Faster economical maturation figures are welcomed, but I cognize determination is much to bash and that is wherefore economical maturation is the fig 1 ngo of this Government.

“Next month’s Budget volition beryllium astir fixing the foundations, truthful we tin present connected the committedness of alteration and rebuild Britain.”