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UK Growth to Slow Next Year After Stronger-than-Expected 2026, Says OECD

The OECD said UK inflation will ease to 2.6% next year, but higher energy prices and policy rates are expected to slow activity.

  • The Organisation for Economic Co-operation and Development upgraded growth forecasts to 1.1% for 2026 but expects a slowdown to 1% next year amid global economic headwinds.
  • Consumer price inflation reached 3.1% last month, with the Bank predicting a peak of around 4% in early 2027 as higher energy prices and "higher policy rate" drag on activity.
  • Treasury minister Emma Reynolds noted the economy is showing "strong resilience" despite conflict in the Middle East and Europe, with families to "be supported by newly announced government support measures."
  • The growth outlook presents challenges as Chancellor John Healey prepares his first Budget at the end of October, amid concerns over Andy Burnham's broader economic ambitions.
  • Global economic risks remain elevated due to ongoing conflict in Iran and weather-related shocks, which could hit farmers and push up food prices next year.
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The Independent broke the news in London, United Kingdom on Wednesday, September 23, 2026.
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