UK’s growth forecast upgraded by OECD

The U.K.’s growth forecast was upgraded Wednesday by the Organisation for Economic Cooperation and Development (OECD) in some good news for the new Labour government.

The OECD revised Britain’s GDP growth for this year and next, forecasting it to hit 1.1 percent in 2024, up from 0.4 percent in its previous May projection, and 1.2 percent in 2025. 

U.K. economic growth was described by the OECD as “robust,” with Britain set to rank joint second among G7 countries this year, behind the U.S, although it looks set to be overtaken by the eurozone next year, which is forecast to grow 1.3 percent.

In less good news, the OECD projects the U.K. will have one of the highest rates of inflation in the G7 over the next year or so, with the economic forecaster projecting headline inflation — which was 2.2 percent in August — will be 2.7 percent across 2024, and is on course to increase by 2.4 percent next year. 

The updated forecast follows the Labour Party’s conference in Liverpool, where Chancellor Rachel Reeves gave a speech aimed at injecting some optimism into the political rhetoric before the Oct. 30 budget, after several gloomy warnings that Labour inherited an ailing economy.

“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,” Reeves said in response to today’s figures. “Next month’s budget will be about fixing the foundations, so we can deliver on the promise of change and rebuild Britain.”