OECD cuts the UK’s 2027 growth forecast to 1% from 1. 1% while raising its 2026 outlook to 1. 1%, citing debt costs and slower growth amid higher oil prices.
The Organisation of Economic Co‑operation and Development (OECD) lowered its projection for UK economic growth next year to 1%, down from a previous 1.1% estimate. In the same report it raised its forecast for this year from 0.9% to 1.1%, noting that the economy has shown more resilience than expected despite rising debt costs and slower growth.
International Monetary Fund (IMF) chief Kristalina Georgieva told the BBC that global economic shocks are pushing debt levels up like a staircase and warned that governments have taken no action to contain the cost, calling for "courage" from politicians. She linked higher inflation to rising interest costs on government debt and an unexpected surge in borrowing in August.
Prime Minister Andy Burnham said the UK’s high borrowing leaves it "over‑exposed" to global shocks but reiterated his view that Britain should be less "in hock" to bond‑market investors. Treasury chief Emma Reynolds highlighted the economy’s resilience and the government’s efforts to give families breathing space while pursuing long‑term growth. Conservative shadow chancellor Andrew Griffith cited the OECD’s call for spending control and public‑sector efficiency, criticizing the government’s tax proposals and high borrowing costs.
The OECD also flagged broader risks to the global economy, including weaker‑than‑expected AI investment returns, climate‑related supply shocks, and weather events such as a strong El Niño that could raise food prices. It noted that higher fuel prices next year will depend on the duration of supply disruptions, with oil stockpiles currently cushioning the impact.