Global economy more resilient than expected amid Trump tariffs, OECD says

"The global economy has been more resilient than expected in the face of Donald Trump's tariffs, but is set to slow over the next year, the Organisation for Economic Co-operation and Development (OECD) has warned. The Paris-based club of industrialised countries has upgraded its projection for global GDP this year, to 3.2% up from the 2.9% it expected in its last forecast in June."

"For the UK, the OECD predicts modestly stronger GDP growth this year of 1.4%, up from 1.3% in its last forecast. However, its projection for next year is unchanged at a relatively sluggish 1% an unhelpful forecast for the chancellor, Rachel Reeves, as Labour battles to kickstart growth. The body said Britain's tighter fiscal stance higher taxes and reduced government spending was expected to weigh on the economy. Reeves will present her budget, at which she is expected to raise taxes, on 26 November."

Global GDP projection for 2025 was upgraded to 3.2% from 2.9% after stronger-than-expected performance in the first half of 2025, particularly in many emerging markets. Industrial production and trade were supported by front-loading ahead of higher tariffs, but those effects are expected to wane. Labour markets are slowing in several countries, contributing to a forecasted global growth slowdown to 2.9% in 2026. The UK is projected to grow 1.4% this year and 1% next year, with a tighter fiscal stance of higher taxes and reduced government spending expected to weigh on the economy and affect its G7 ranking.

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