UK forecast to have highest inflation in G7

"The Organization for Economic Co-operation and Development (OECD) raised its forecast for UK inflation - the rate at which prices rise - to 3.5% across 2025, the highest in the G7. It increased its forecast for UK growth slightly this year to 1.4%, but the economy is still expected to slow next year. The forecast comes as Chancellor Rachel Reeves is preparing November's Budget in which she is expected to put up taxes or cut spending in order to stick to her own rules on government borrowing."

"The latest monthly UK inflation figures showed the rate stood at 3.8% in August, driven by rising food prices, and the OECD said the UK was one of several countries being hit by higher food costs. The inflation rate is well above the Bank of England's target of 2%, and the Bank has predicted the rate will hit 4% before falling back. Last week, the Bank kept interest rates unchanged and warned the UK was not "out of the woods yet" when it came to inflation."

OECD raised its forecast for UK inflation to 3.5% across 2025 and slightly increased UK growth to 1.4% for this year while expecting a slowdown next year. August monthly inflation stood at 3.8%, driven by rising food prices, and is well above the Bank of England's 2% target; the Bank expects inflation may hit 4% before easing. Growth is forecast to fall to 1% in 2026 due to a tighter fiscal stance, higher trade costs and uncertainty. Chancellor Rachel Reeves is preparing a November Budget that may raise taxes or cut spending to meet borrowing rules. OECD also lifted its 2025 global growth forecast.

Read at www.bbc.com