Tag: G7

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UK predicted to have slowest growth of richest nations in 2025

Slow growth in UK

Forecasts indicate that the UK economy will experience sluggish growth among the largest developed nations in 2025.

The Organisation for Economic Co-operation and Development (OECD) has projected a 1% increase in the UK’s gross domestic product (GDP) for 2025, which lags behind the growth rates of other G7 nations, including Canada, France, Germany, Italy, Japan and the US.

The OECD, a globally recognised think tank, has described the UK’s economic outlook as ‘sluggish‘ for the current year. The organization attributes the lackluster performance to the cumulative effects of consecutive interest rate hikes in the UK.

Additionally, the OECD has cautioned that persistent elements of high inflation and the uncertainty surrounding the Bank of England’s interest rate decisions may deter investment.

The latest forecast for the UK economy predicts a 0.4% growth for this year, a revision downward from the OECD’s earlier estimate of 0.7% growth. Consequently, Germany is the only G7 country projected to have slower growth than the UK this year.

Year on year economic growth predictions for G7 nations from the OECD

Year on year economic growth predictions for G7 nations from the OECD
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IMF and UK interest and inflation fears

6% UK interest rate IMFprediction

The International Monetary Fund (IMF) is an international organization that monitors the health of the global economy and provides financial assistance to countries in need.

UK interest rate warning from the IMF

  • The IMF has warned that the UK faces another five years of high interest rates to stem rising prices, which have been falling but remain stubbornly above target.
  • The IMF expects the UK to have the highest inflation and slowest growth next year of any G7 economies, which includes the US, France, Germany, Canada, Italy and Japan.
  • The IMF says the UK’s immediate prospects are being weighed down by the need to keep interest rates high to control inflation, which is partly caused by the terms-of-trade shock from high energy prices, the aftereffects of the global pandemic, Brexit fallout and the Russia/Ukraine war.

Peak at 6%!

The IMF believes Bank of England rates will peak at 6% and stay around 5% until 2028. Rates are currently 5.25%.