Tag: OECD

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Debt and trade issues weaken UK growth – so says the OECD

UK growth

The latest OECD report presents a cautious outlook for the UK economy, predicting slower growth amidst global uncertainties and domestic fiscal challenges.

The UK’s GDP is projected to grow by 1.3% in 2025 and 1% in 2026, reflecting a slight downward revision.

According to the OECD, trade tensions, particularly U.S. tariffs, are disrupting global supply chains and weakening business confidence.

At the same time, consumer sentiment remains low, and business investment is expected to decline, counteracting the benefits of recent government spending initiatives.

A significant concern highlighted in the report is the UK’s public finances. The OECD warns that the government’s limited fiscal buffers could leave the economy vulnerable to future downturns.

It suggests targeted spending cuts and tax reforms, including a reassessment of council tax bands to reflect updated property valuations.

Debt interest

The OECD has warned that high interest payments on government debt and trade tensions are weighing on the UK’s economic growth. The UK’s fiscal position is described as having ‘very thin’ margins, meaning there is little room for unexpected financial shocks – of which there have been many.

Despite these hurdles, the UK is expected to outperform some major European economies, including France and Germany. However, the UK government face a complex challenge, balancing growth stimulation with fiscal responsibility.

The OECD encourages the government to accelerate infrastructure investments and enhance productivity to ensure long-term economic resilience.

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OECD cuts U.S. growth forecast amid Trump’s tariff chaos

OECD U.S. data

The Organisation for Economic Co-operation and Development (OECD) has sharply downgraded its U.S. growth forecast, citing economic uncertainty and the impact of President Donald Trump’s tariff policies.

The OECD now expects the U.S. economy to expand by just 1.6% in 2025 and 1.5% in 2026, a significant cut from its previous estimate of 2.2% for 2025.

The report highlights several factors contributing to the slowdown, including elevated policy uncertainty, reduced net immigration, and a shrinking federal workforce.

The OECD also warns that higher trade barriers could further dampen business confidence and investment.

Global growth projections have also been revised downward, with the OECD stating that the slowdown is most pronounced in North America, particularly in the U.S., Canada, and Mexico.

The organisation reportedly notes that U.S. tariff-related disruptions are expected to push inflation higher, although weaker commodity prices may offset some of the impact.

The OECD’s latest outlook underscores the growing challenges facing the U.S. economy as trade tensions persist.

With tariffs fluctuating due to ongoing ‘stop start’ legal interventions, businesses and investors remain cautious about the future.

The coming months will be crucial in determining whether policymakers can stabilise growth and restore confidence in the market.

Stop the tariffs and all will be fine.

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New HMRC UK tax rules for online sellers

Tax

Are you selling online and making a little extra income?

Well, if you are, as from 1st January 2024 you will now fall foul of UK tax rules if you do not declare the income generated from these sales.

Companies like Etsy, eBay, Vinted, Airbnb etc. are obliged to collect and share details of such transactions with the tax authorities. That will allow HMRC to zero in on anyone who should be declaring the extra income but isn’t.

While HMRC was already able to request information from UK-based online operators, from the start of this year there are new rules that the UK has signed up to in cooperation with the OECD – Organisation for Economic Cooperation and Development, as part of a global effort to clamp down on tax evasion.

New rules

The new rules require digital platforms to report the income sellers are getting through their site on a regular basis.

It will apply to sales of goods such as second-hand clothes and items that have been handcrafted, but also services such as: food delivery, taxi hire, freelance work and accommodation lets or even renting out your driveway for parking.

Rule summary

  • Online sellers already paying tax do not need to alter what they are already doing.
  • Individuals have a £1,000 tax-free allowance for money made through property.
  • There is also a £1,000 allowance for trading income – for example, if you offer tutoring or gardening, or if you are selling new or second-hand items online.
  • People earning below those thresholds may not have to fill in a tax return, but should keep records in case they are asked for them.

The information will be shared between countries that have signed up to the OECD tax rules.

The UK government said the new rules would help it ‘bear down on tax evasion’, as sellers on digital platforms would now be treated more like traditional businesses.