The OECD has revised its UK economic growth forecast for this year downward to 1.3%, amid concerns over US tariffs and rising government debt payments. The organization noted that while UK growth was temporarily bolstered by a 0.7% increase early in the year, overall momentum is fading due to declining business sentiment. Chancellor Rachel Reeves is facing difficult decisions in her forthcoming Spending Review, urged to balance spending cuts with tax increases to strengthen public finances and address critical areas such as defense and the NHS.
The OECD has cut its expectations for UK growth this year to 1.3% from 1.4%, citing US tariff barriers and high interest payments on government debt.
The OECD cautioned that momentum is weakening due to deteriorating business sentiment, and suggested a balanced approach to fiscal management for UK economic stability.
Chancellor Rachel Reeves faces tough choices in her upcoming Spending Review amid commitments to defense and NHS, while needing to strengthen the country's finances.
The OECD emphasized the importance of maintaining healthy public finances, recommending targeted spending cuts and closing tax loopholes to mitigate economic challenges.
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