OECD Cuts UK 2027 Growth Forecast to 1%, Warns on Inflation and Rates

The Organisation for Economic Cooperation and Development cut its forecast for UK economic growth in 2027 to 1% on Wednesday, a 0.1 percentage-point downgrade, and raised its 2027 inflation projection by 0.2 points to 2.6% — above the Bank of England's 2% target for a seventh straight year. The Paris-based forum estimated UK growth of about 1.1% this year, up from an earlier 0.9% forecast, but said the Iran war and an El Niño weather event would drive higher food and energy costs. It warned central banks must be ready to raise interest rates if price pressures broaden. The downgrade lands as Prime Minister Andy Burnham markets Britain to investors in New York and weeks before a Budget that economists say may require up to £10 billion in tax rises or spending cuts. The OECD urged governments to contain spending and improve public sector efficiency.