The UK economy will grow more slowly than expected this year and will stagnate next year, a think tank says.
The Organisation for Economic Co-operation and Development expects the UK economy to grow by 3.6% this year, followed by 0% growth next year.
It means the UK will go from the second-fastest growing economy in the G7 group of industrial nations to the slowest growing in 2023.
The G7 members are the UK, US, Canada, Germany, Japan, France and Italy.
The OECD is a group of countries which aims to assist economic development, raise living standards and promote growth in world trade.
Laurence Boone, the Paris-based think tank’s chief economist, said the UK was being hit hard by a combination of factors, including higher interest rates, higher taxes, reduced trade and more expensive energy and food.
However, the report does not take into account the chancellor’s emergency measures announced on 26th May. Those measures, which included a £400 energy bill discount for every household in the UK, are worth around £15bn.
A Treasury spokesperson said many people would be concerned by the forecasts.
“While we can’t insulate the UK from global pressures entirely, our economy is in a strong position to deal with these challenges. We have a plan for growth, and we are supporting people with the cost of living,” they added.
Rachel Reeves, Labour’s shadow chancellor, said the OECD report “lays bare the extreme challenges facing the UK economy”.
“That economic growth in the UK will grind to a halt next year, with only Russia performing worse than us in the G20, is a shameful indictment of the chaos and incoherence of this Conservative government,” she said.
“Labour would create a more secure economy by spending wisely, taxing fairly, and getting the economy firing on all cylinders.”
