What's happened
The OECD has revised its UK economic growth projections upward to 1.7% for 2025, citing a boost from the recent autumn Budget. However, inflation is expected to exceed previous forecasts, reaching 2.7% next year, complicating the economic outlook.
Why it matters
What the papers say
According to the BBC, the OECD's report highlights that while the UK economy is set to grow, inflation will likely exceed rates seen in other major economies. Chancellor Rachel Reeves emphasized that 'growth is our number one priority,' reflecting a commitment to economic recovery. The Independent noted that the OECD's forecast for UK GDP growth has been upgraded due to the autumn Budget's public spending boost, although it also cautioned about the risks posed by high inflation. The report indicates that while retail sales are on an upward trend, the overall economic landscape remains uncertain, with the OECD stating that 'risks and uncertainties are high' for the global economy.
How we got here
The UK government, led by Chancellor Rachel Reeves, announced plans for nearly £70 billion in additional public spending funded through tax increases and borrowing. This move aims to stimulate economic growth amid rising inflation concerns.
Common question
-
How Will the Recent UK Budget Affect Interest Rates?
The recent UK Budget has sparked discussions about its potential impact on interest rates and the overall economy. With the OECD upgrading its growth forecasts, many are left wondering how these changes will affect everyday life and financial decisions. Below are some common questions regarding the implications of the Budget and interest rates.
More on these topics
-
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based.
-
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom or Britain, is a sovereign country located off the northwestern coast of the European mainland.
-
Rachel Jane Reeves is a British Labour Party politician serving as Shadow Chancellor of the Duchy of Lancaster and Shadow Minister for the Cabinet Office since 2020. She has been the Member of Parliament for Leeds West since 2010.