{"id":39988,"date":"2025-09-24T03:27:08","date_gmt":"2025-09-24T03:27:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/39988\/"},"modified":"2025-09-24T03:27:08","modified_gmt":"2025-09-24T03:27:08","slug":"uk-inflation-to-be-highest-in-g7-this-year-oecd-warns","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/39988\/","title":{"rendered":"UK inflation to be highest in G7 this year, OECD warns"},"content":{"rendered":"

Britain will suffer the highest level of \u00adinflation of any major economy this year, piling more pressure on household budgets, influential analysis warns.<\/p>\n

The Organisation for Economic Co-operation and Development (OECD) said that alongside slowing growth the UK would face an annual rate of inflation of 3.5 per cent by the end of the year, up from 2.5 per cent last year and far above the Bank of England\u2019s target.<\/p>\n

Rachel Reeves is now facing questions about how she will avoid worsening inflation in the budget<\/a>, after last year\u2019s national insurance rises were blamed for pushing up wages and food costs. The chancellor needs to find up to \u00a330 billion<\/a> to hit her fiscal rules as interest costs from rising debt combine with a retreat on attempts to cut welfare and winter fuel payments.<\/p>\n

However, the Treasury is said to be frustrated that about \u00a320 billion of the gap in the public finances is likely to come from a decision by the Office for Budget Responsibility<\/a> to downgrade productivity estimates that have increasingly appeared optimistic.<\/p>\n

The UK\u2019s stubborn inflation this year has made it an outlier among European economies, where average rates have fallen to 2 per cent. The Bank expects headline inflation to peak at 4 per cent in September \u2014 double its target rate \u2014 and financial markets expect no more interest rate cuts<\/a> this year.<\/p>\n

The OECD lifted its projection for the UK\u2019s core inflation, which strips out elements such as food and energy, by 0.6 per cent to 3.7 per cent. The headline and core inflation rates are expected to be the highest in the G7 group of developed nations for this year.<\/p>\n

\u2022 David Smith: High expectations make it harder to get inflation down<\/a><\/p>\n

It means households will face a \u00adsignificant rise in the cost of living amid rising prices in shops and increasing energy bills.<\/p>\n

\"Shopping<\/p>\n

Food prices keep rising<\/p>\n

ALAMY<\/p>\n

The OECD lifted its projection for the UK\u2019s core inflation, which strips out elements such as food and energy, by 0.6 per cent to 3.7 per cent. The headline and core inflation rates are expected to be the highest in the G7 group of developed nations and above the G20 average for this year.<\/p>\n

Reeves seized on the OECD decision to upgrade its economic growth forecast for the UK from 1.3 per cent to 1.4 per cent this year \u2014 the second fastest rate in the G7 after the US, which is on course to expand by 1.8 per cent.<\/p>\n

\u201cThese figures confirm that the British economy is stronger than forecast \u2014 it has been the fastest growing of any G7 economy in the first half of the year,\u201d she said. \u201cBut I know there is more to do.\u201d<\/p>\n

Sir Mel Stride, the shadow chancellor, said: \u201cLabour has put Britain in a high tax, high inflation, low growth doom loop. Rachel Reeves thinks the solution is more tax rises. The UK is now on the edge of stagflation, all driven by Labour\u2019s economic mismanagement.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Britain will suffer the highest level of \u00adinflation of any major economy this year, piling more pressure on…\n","protected":false},"author":2,"featured_media":39989,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-39988","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/39988","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=39988"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/39988\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/39989"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=39988"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=39988"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=39988"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}