The OECD’s global growth forecast for this year is unchanged at 2.9%, but it predicts inflation across the G20 countries will be 4%, sharply up from its previous forecast of 2.8%.
The OECD now forecasts UK inflation will hit 4% this year, up from the previous estimate of 2.5%. It then forecasts inflation to drop to 2.6% in 2027 – still up from its previous projection of 2.1%.
Among G7 countries, only the US is predicted to have higher inflation than the UK in the forecast, while only Italy is expected to see weaker growth.
In early March the UK government’s official forecaster, the Office for Budget Responsibility (OBR), cut its expected growth rate for the UK this year to 1.1% from the 1.4% it predicted in last year’s Budget.
But this forecast was made before the Iran war, which the OBR said could have a “very significant” impact on economies.
