In its latest outlook, the OECD downgraded the United Kingdom’s projected growth for 2027, a shift that comes as the country tries to build on a surprisingly robust performance in 2026 despite the backdrop of the ongoing Middle‑East conflict.
The downgrade is seen as a blow to the ambitions of Labour leader Andy Burnham, who has been promoting a narrative of sustained expansion and job creation across the country.
Alongside the growth revision, the OECD said that UK inflation is expected to run below its earlier forecasts for the current year, but the path back to the Bank of England’s target will be slower than previously anticipated.
The organisation warned that recent spikes in energy prices, linked to the prolonged conflict, are likely to add short‑term inflationary pressure before easing gradually next year.
Inflation rose to a five‑month high of 3.1% last month, and the Bank of England has projected it will climb to 3.75% by the end of the year, peaking at around 4% in early 2027.
Burnham responded by emphasizing collective resilience, stating, “We will face these challenges together and we are already giving families space to breathe. We had the fastest growth in the G7 in the first half of the year and we are starting the big, long‑term changes needed to create good jobs and growth in every postcode.”