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The OECD projects UK growth at 1.2% in 2026, citing tax hikes and spending cuts as key constraints.
The OECD warns the UK economy will slow to 1.2% growth in 2026 and 1.3% in 2027 due to ongoing tax hikes and spending cuts, which are reducing household income and consumption.
Inflation remains high among G7 nations, projected at 3.5% in 2025 and 2.5% in 2026, though lower than earlier forecasts.
The organization acknowledges fiscal tightening will improve the deficit, with tax revenue reaching 40% of GDP, but stresses the need for balanced, well-timed policies and structural reforms to support long-term growth.
While interest rates are expected to ease to 3.5% by mid-2026, they may stay elevated if inflation persists.
Chancellor Rachel Reeves welcomed the OECD’s updated outlook, claiming her Budget will reduce inflation and ease living costs, though critics argue austerity risks weakening growth.
La OCDE proyecta un crecimiento del Reino Unido del 1,2% en 2026, citando alzas de impuestos y recortes de gastos como restricciones clave.