The UK is set to leapfrog rivals with the second-fastest growth in the G7 this year, according to new forecasts.
The OECD has upgraded predictions for the British economy, suggesting only the US will perform better this year among the top group.
The anticipated 1.1 per cent expansion is on a par with Canada and France – and compares to May when the international body had the UK bottom of the pile.
It raises fresh doubts about Chancellor Rachel Reeves’ doomsaying pronouncements about the legacy from the Tories.
Ms Reeves said this morning she ‘welcomed’ the brighter numbers but there was still ‘work to do’, with the Budget looming on October 30.
The OECD has upgraded predictions for the British economy , suggesting only the US will perform better this year among the top group
It raises fresh doubts about Chancellor Rachel Reeves’ doomsaying pronouncements about the legacy from the Tories
The OECD wrote in its interim report that global economic growth ‘has remained resilient and inflation has continued to moderate’.
It added: ‘Recent activity indicators suggest ongoing momentum, especially in services sectors. Real wage growth is now supporting household incomes and spending, though purchasing power has yet to fully return to pre-pandemic levels in many countries.
‘Global trade is recovering faster than expected, but shipping costs remain elevated and export orders have recently moderated.’
But it added: ‘Significant risks remain. Persisting geopolitical and trade tensions could increasingly damage investment and raise import prices.’
The OECD said last week that the UK’s economic outlook is ‘gradually’ improving, upgrading its forecasts for UK growth to 1.1 per cent in 2024 and 1.2 per cent in 2025.
It urged Ms Reeves to not just raise taxes but look at wider reforms of the tax system ahead of the Budget in October.
While the UK has climbed several spots in forecasts for this year versus the OECD’s last forecast in May, it is only set to enjoy joint-fourth fastest growth in 2025, ahead of only Germany and Italy.
Japan is the other member of the elite group.
UK inflation is on course to average 27 per cent this year and 2.4 per cent next year, the fastest rate in the G7
UK inflation is on course to average 27 per cent this year and 2.4 per cent next year, the fastest rate in the G7.
Ms Reeves said: ‘Faster economic growth figures are welcomed, but I know there is more to do and that is why economic growth is the number one mission of this Government.
‘Next month’s Budget will be about fixing the foundations, so we can deliver on the promise of change and rebuild Britain.’
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