UK economy will grow by less than expected next year, OECD says
Higher energy prices due to the conflict in the Middle East and climate change could hit growth.
The Organisation for Economic Co-operation and Development (OECD) has forecast the UK's economic growth for 2027 to be less than initially anticipated due to the ongoing conflict in Iran. This downgrade to the UK's growth outlook is moderate, with the agency predicting a 1% increase in 2027 compared to the earlier forecast of 1.1%.
However, the OECD has revised the UK's growth outlook for 2026 upwards, from an expected 0.9% to 1.1% for the year, as solid domestic demand growth is anticipated in the short-term. Higher fuel prices are expected to have a negative impact on UK growth in 2027, but the extent of this effect will depend on the duration of supply disruptions.
The OECD also highlighted climate-related supply shocks as potential risks to the global economy, which could further impact growth in countries such as Australia, Canada, and the Euro-area.
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