Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

OECD says UK will be only big, rich economy to shrink this year

by March 17, 2023
March 17, 2023
OECD says UK will be only big, rich economy to shrink this year

The UK is still on course to be the only big wealthy economy to register negative growth this year, despite an upturn in growth prospects, according to new international forecasts.

Projections from the Organisation for Economic Coordination and Development (OECD) show that the UK economy will be an outlier among wealthier countries with an annual contraction in growth this year of 0.2 per cent.

That is 0.2 percentage points better than the OECD’s last forecast in November but remains the worst performance among the richest countries.

The OECD’s forecast matches updated projections from the Office for Budget Responsibility (OBR), which said this week that the economy would narrowly avoid a technical recession this year, defined as two quarters of negative growth. The improved outlook is the result of lower energy prices and resilient consumer and business sentiment recorded this year. The economy will experience a “mild” recovery of 0.9 per cent next year, according to the OECD forecast.

Germany, which was expected to be the worst-performing economy in the eurozone, will now record positive growth of 0.3 per cent rather than a 0.3 per cent contraction, according to the OECD, which also upgraded its projections for Italy, Spain and France. The single currency area is on course to record annual growth of 0.8 per cent this year and global growth to fall from 3.2 per cent in 2022 to 2.6 per cent.

The United States, the world’s largest economy, will record growth of 1.5 per cent this year, 0.5 percentage points better than the last forecast, before slowing to growth of 0.9 per cent in 2024, partly as a result of aggressive monetary tightening from the US Federal Reserve.

Headline inflation in the UK is on course to average 6.7 per cent this year, in line with the likes of Germany and Italy. The OBR expects consumer price inflation to drop to 2.9 per cent by the end of the year.

The OECD said growth across the world economy would remain below pre-pandemic trends but falling inflation would give a bigger boost to incomes this year than expected. “The improvement in the outlook is still fragile,” it said. “Risks have become somewhat better balanced but remain tilted to the downside. Uncertainty about the course of the war in Ukraine and its broader consequences is a key concern.”

Amid concerns over global financial stability following the collapse of three US banks this week the report warned that further interest rate rises could “continue to expose financial vulnerabilities” in the markets.

Problems in parts of the financial system in recent months, including the UK’s pension fund crisis, will require central banks to carry out “clear communication” over the shrinking of their balance sheets to “minimise the risk of contagion”, the OECD said.

“Higher interest rates could also have stronger effects on economic growth than expected, particularly if they expose underlying financial vulnerabilities. While a cooling of overheated markets, including real estate markets, and repricing of financial portfolios are standard channels through which monetary policy takes effect, the full impact of higher interest rates is hard to gauge.”

James Hunt, the chancellor, said: “The British economy has proven more resilient than many expected, outperforming many forecasts to be the fastest growing economy in the G7 last year, and is on track to avoid recession.

“Earlier this week I set out a plan to grow the economy by unleashing business investment and helping more people into work, alongside extending our significant energy bill support to help with rising prices, made possible by our windfall tax on energy profits.”

Read more:
OECD says UK will be only big, rich economy to shrink this year

0
FacebookTwitterGoogle +Pinterest
previous post
Fearless Rotation Back To Growth Stocks Is Unfolding Now
next post
Passport delay warning as five-week strike called

You may also like

Farage insists UK’s Brexit deal can be improved...

February 4, 2025

UK small businesses face costs 10k higher than...

December 14, 2023

UK Retailers Enjoy 40% Boost in Summer Sales...

September 18, 2024

Government plans £100m annual levy on gambling firms...

November 26, 2024

From Burnout to Balance: A Lawyer’s Journey of...

August 12, 2024

Fears of Capital Gains Tax rise pushing UK...

October 7, 2024

Pimlico Plumbers founder Charlie Mullins says he will...

August 29, 2023

Business leaders join PM’s new Business Council to...

July 18, 2023

Huge betting demand is coming towards Qatar!

November 25, 2022

As wealthy Americans flee Trump’s chaos Britain is...

May 3, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Biden only hand-signed one pardon during final spree, and it was his most controversial one

      June 5, 2025
    • GOP bill takes aim at Congress’ ‘no rules apply’ emergency spending

      June 5, 2025
    • White House highlights Pelosi hypocrisy after Schiff demands Trump admin financial, ethics docs

      June 5, 2025
    • Musk says Trump would have lost 2024 election without him as ‘Big, Beautiful Bill’ feud continues

      June 5, 2025
    • Ex-Biden advisor calls Jean-Pierre ‘kinda dumb,’ deletes tweet, says she’s not a ‘genius-level Black woman’

      June 5, 2025
    • Harmony Squad: Supreme Court Issues Six Unanimous Decisions

      June 5, 2025

    Categories

    • Business (8,149)
    • Investing (2,011)
    • Politics (15,538)
    • Stocks (3,128)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved