The UK is set to experience the joint-second highest economic growth among wealthy nations in 2024, with a 1.1% increase, matching Canada and France, according to a prediction by the Organisation for Economic Co-operation and Development (OECD). This marks a significant improvement from its earlier growth estimate of 0.4%.
Chancellor Rachel Reeves welcomed the news, saying it would bolster confidence ahead of the upcoming budget. She emphasized that the government will focus on “fixing the foundations” of the economy to encourage future investment.
Despite the positive growth outlook, the OECD warned of risks such as geopolitical tensions and rising consumer prices. Alvaro Pereira, the OECD’s chief economist, suggested that the UK should create “fiscal space” for infrastructure investment, especially for the green transition.
However, while the UK is expected to see strong growth in 2024, it is forecast to slow to 1.2% in 2025, placing it fourth among G7 nations. The UK is also projected to experience higher inflation compared to other G7 countries, with prices set to rise by 2.7% this year.