HomeUKUK inflation to be highest among major economies in 2023: OECD

UK inflation to be highest among major economies in 2023: OECD

A person walks through the City of London financial district in London, Britain, February 10, 2023. REUTERS/Henry Nicholls/File Photo Acquire license rights

LONDON, Sept 19 (Reuters) – Britain remains on track to have the highest inflation of the major rich economies in 2023, according to forecasts from the Organization for Economic Co-operation and Development that showed the country’s inflation problem worsening. is expanding compared to most of its peers.

Britain’s headline inflation rate was set to average 7.2% during 2023, up from a previous forecast of 6.9% made by the OECD in June.

The new estimate represented the biggest upward revision for any Group of Seven economy – other than Japan – in the Paris-based think tank’s latest set of projections released on Tuesday.

It was also higher than the expected inflation for this year in Germany, of 6.1%, and 5.8% in France, which represented cuts compared to the OECD’s June forecasts.

Prime Minister Rishi Sunak has promised to halve inflation by the end of this year ahead of the election due in 2024, meaning it would have to fall from around 7% now to around 5% in December compared to the same month last year.

Updated OECD projections, which suggested hitting that target will be a short-term issue, showed British inflation would slow to 2.9% in 2024, the same as France and slightly below Germany’s 3.0%. .

“Today the OECD has presented a challenging global outlook, but it is good news that they expect UK inflation to fall below 3% next year,” Finance Minister Jeremy Hunt said in a statement.

Britain’s high inflation rate has led the Bank of England to raise borrowing costs 14 times in a row since December 2021. is expected to increase The bank rate rises again to 5.5% from 5.25% on Thursday, although economists and investors believe it could be the latest increase in the Bank of England’s attempts to quell inflation risks in an economy that is showing signs of deceleration.

The OECD said it expected the British economy to grow 0.3% in 2023, unchanged from its June forecast and the second weakest performance among rich economies after Germany, before expanding 0.8% in 2024, the weakest along with Italy.

Written by William Schomberg, edited by Andy Bruce

Our standards: The Thomson Reuters Trust Principles.

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