The UK economy is gradually improving, with GDP projected to grow from just 0.1% in 2023 to 1.1% in 2024, showing signs of resilience despite challenging conditions.
Persistent inflation remains a key issue, particularly with core inflation expected to remain elevated at 3.7% in 2024 due to ongoing services price pressures, necessitating a restrictive monetary policy.
The OECD emphasizes the importance of government reforms, advocating for tax reforms to reduce exemptions and enhance compliance, which could help rebuild fiscal space and reduce economic distortions.
With weak employment growth and rising inactivity, particularly due to long-term sickness, reforming work incentives is crucial for increasing labour force participation and supporting overall economic recovery.
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