OECD reduces growth forecasts in the UK while Rachel Reeves is fighting with a weak economy

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The Great Britain’s growth will be weaker than expected this year and next, according to the OECD, as Chancellor Rachel Reeves is fighting to bring momentum into economics.

Body based in Paris on Monday pruned its own GDP in the UK Growth assessment by 2025 to 1.4 percent, which is a reduction of 0.3 percent point from the previous calculation, after a disappointing recent economic effect.

OECD added in temporary economic prospects that the Green Growth will slow down to 1.2 percent in 2026 after reducing the forecast by a year by 0.1 percentage point.

The reduction comes in front of Reeves’ Spring Statements of High Role 26, March 26, when it is expected that official forecasts will show a much weaker chance of GDP.

Countries around the world, including the UK, have also been organized for increasing pressure from the US President Donald Trump.

IN The latest forecasts of OECD A 25 percent of the Tariff factor introduced by Trump to import from Canada and Mexico, his increase in 20 percentage points at China, as well as US steel and aluminum taxes that affect countries, including the UK.

USA tariffs It will withdraw global activity, as well as add to trade costs and increase the prices of wide consumption goods, OECD said.

Temporary prospects reduced the predictions of the output for a dozen G20 countries, leaving the UK, set up to have the second highest growth in the G7 2025 after the US.

But Reeves is looking for new growth sources ahead of his spring statement after an unexpected economy in the UK Contracted by 0.1 percent In January, guided by weakness in production, according to official data. Growth has mostly paused since May last year.

Reeves was supposed to get a weaker growth forecast than a fiscal guard in the UK, which will agree on pressures on public finances at a time when Britain and other European countries accelerate efforts to increase the costs of defense with respect to Trump’s military military commitment to the region.

The budget responsibility office is expected to say that the head against the Reeves key fiscal rule will be wiped with higher borrowing costs and weaker growth, forcing it to a pen in reducing fresh public costs.

In October, October predicted GDP Green of UK from 2 percent in 2025 and 1.8 percent in 2026, but forecasts on the IMF -ui bank of England bank were less optimistic.

The main economist OECD álvaro pereira invited the action to retain UK borrowing, saying: “The debt in the UK is quite high, so it is time to ensure that the fiscal situation remains under control.”

In his temporary appearances, OECD said that central banks around the world would have to remain “awake” with respect to current inflation pressure.

It predicts that the UK inflation will be established at 2.9 percent this year and then to 2.3 percent in 2026, which gave Boeu the opportunity to further reduce interest rates.

Boe is expected to retain rates unchanged when meeting Thursday after it Canceled them for a quarter at 4.5 percent last month.

The consequences for global inflation from growing trade barriers will depend on the extent of further escalation, OECD said.

“The one -off increase in the relative price of commercial goods due to tariffs is likely to be adapted, but a number of such changes, or characterized that inflation expectations grow in the midst of still narrow labor markets, would probably require higher policy rates than would otherwise be the case,” he added.

Earlier this month, Reeves acknowledged stricter economic prospects in the UK, given the exacerbating hostilities of global trade. “I don’t want to see the tariffs increase,” Reeves said at an event hosted by the UK, a lobby group for manufacturers.

On Monday, she said, “This report shows that the world is changing, and increased global winds like trade uncertainty feel on the whole side.

“A world that changes means that Britain must also change, and we deliver a new era of stability, security and renewal to protect working people and protect our country.”