The UK economy is in trouble. OECD's gloomy forecast

The British economy will be hit harder by the effects of the war with Iran than the economy of any other G20 country, British media point out, citing the forecast of the Organization for Economic Co-operation and Development (OECD) published on Thursday.

The OECD forecast is the first announced by any global financial institution after the start of the US-Israeli war with Iran and attempting to take into account its effects. According to the OECD, this year's economic growth around the world will not change compared to what the organization predicted in December 2025 and will amount to 2.9%, while next year's will be 0.1 percentage point lower. – 3.0 percent instead of the previously forecast 3.1 percent.

However, for some countries the differences between the current forecast and the one in December are significant. As noted by the British media, this year's growth forecast for Great Britain has changed the most unfavorably among all G20 countries – instead of 1.2 percent it will amount to only 0.7 percent, which means a decrease of 0.5 percentage point. Behind the UK are South Korea and the euro zone, for which the OECD lowered its growth forecast by 0.4%. In turn, in 2027, British GDP growth is expected to amount to 1.3%, which is the same as in the December forecast.

Great Britain is also among the countries in which the OECD has raised this year's inflation forecast the most since December. According to the new forecast, it will amount to 4 percent, i.e. 1.5 percentage points. more than the OECD predicted three months ago. A larger change compared to the December forecast occurs only in the case of Argentina (by 13.7 percentage points) and Turkey (by 5.9 percentage points). Next year, inflation in Great Britain is expected to be 2.6%. – by 0.5 percentage point beyond what the OECD had previously predicted.

As the British media explain, the fact that the British economy will suffer the most from the war is due to the fact that it is largely dependent on international trade and fuel imports. (PAP)

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