UK Economy Will Grow Less Than Expected Next Year

The UK's economic growth outlook has been downgraded to less than expected next year by the Organisation for Economic Co-operation and Development (OECD), citing higher energy prices due to the conflict in the Middle East and climate change.

According to the OECD, the UK will grow by 1% in 2027, against an earlier forecast of 1. 1%, but this is expected to be lower than predicted in 2028 as fuel prices eat into growth.

The downgrade comes as Chancellor John Healey prepares to deliver his first Budget at the end of October and marks a shift from solid domestic demand growth to higher short-term risks to the global economy, including the war in the Middle East and climate-change related supply shocks.

Global growth is also expected to be 0. 1% lower next year, with countries affected including Australia, Canada, and the Euro-area, due to higher oil and gas prices globally and weather-related shocks from a strong El Nino.

Higher fuel prices could hit growth, according to the OECD. The effects of this depend on how long supply disruptions last, it said.

The downgrade is a shift from solid domestic demand growth to higher short-term risks to the global economy, including the war in the Middle East and climate-change related supply shocks.

The UK's economic growth outlook has been downgraded to less than expected next year by the Organisation for Economic Co-operation and Development (OECD), citing higher energy prices due to the conflict in