span>span>Wednesday 09th June /span>span>2022/span>span> - 08:12 (BST)/span>/span>
The Organisation for Economic Co-operation and Development (OECD) has forecast UK economic growth will stall during 2023, placing it only above Russia in its outlook amongst leading G20 economies.
The Paris-based organisation’s forecast highlighted the effects of high UK inflation still squeezing household and corporate incomes in 2023, alongside a further round of tax increases as the main drivers of the country’s expected weak economic activity.
The OECD forecast that the UK economy would record growth of 3.6% in 2022, although much of that reflected recovery from coronavirus at the end of last year.
But this growth would fall to zero next year as households are increasingly squeezed. Inflation would remain high and average 7.4% next year having hit double digits later this year. The OECD said the economy would be “stagnating in 2023 due to depressed demand”.
The announcement immediately placed further pressure on GBP, already struggling for traction amidst recent political wrangling at Downing Street. Current UK Prime Minister Boris Johnson narrowly survived a vote of confidence last week, with question marks remaining over his ability to lead the party long-term.
Attentions now turn to Europe as its central bank announces their latest decision on interest rates for the upcoming quarter later today. Analysts are now expecting a change in approach after 8 years of negative rates, however it is unclear whether there will be any increases during the first half of 2022.
