UK suffers OECD’s biggest growth downgrade as Iran war pushes up energy costs
The UK's economic growth prospects have been downgraded by the OECD due to the conflict in Iran, with growth forecast to be 0.7% in 2026. The OECD also expects inflation to rise faster, with a forecast of 4.0% in 2026, driven by higher energy prices.
The UK's economic growth has been downgraded by the OECD. The forecast for 2026 is now 0.7%, a half percentage point decrease. Inflation is expected to rise to 4.0% in 2026. The OECD attributes this to planned fiscal tightening and higher energy prices. The UK's growth forecast for 2027 remains unchanged at 1.3%. The Bank of England is expected to keep interest rates unchanged this year, then cut them in Q1 2027.
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