UK growth forecast to be slowest of richest nations, says OECD

The UK economy will see the slowest growth compared to the largest developed nations next year, according to forecasts.

The Organisation for Economic Co-operation and Development (OECD) predicted that UK gross domestic product – a key measure of economic health – will rise by 1%.

This is below the rest of the G7 nations, which include Canada, France, Germany, Italy, Japan and the US.

The OECD said the UK economy would be “sluggish” this year.

The organisation blamed the after-effects of a succession of interest rate rises in the UK for the lethargic performance.

It also warned that some elements of inflation remained “sticky” and that uncertainty over when the Bank of England might change interest rates “will impede investment”.

The UK economy is now forecast to expand by 0.4% this year, a downgrade from the OECD’s previous projection for 0.7% growth.

It means that for this year only Germany will see slower growth, it said.

Chancellor Jeremy Hunt said the forecast showed the UK was “winning the war” against inflation.

“This forecast is not particularly surprising given our priority for the last year has been to tackle inflation with higher interest rates”, he wrote, adding that “growth matters”.