OECD UK GDP forecast cut
Analysis based on 8 articles · First reported Jul 15, 2026 · Last updated Jul 15, 2026
The OECD's downgrade of UK GDP growth to 0.9% for 2026 reflects headwinds from energy inflation and geopolitical tensions, potentially dampening investor sentiment. However, the UK's relative outperformance within the G7 and stable public finances may limit negative market reaction.
The OECD published a report on the UK economy, maintaining its forecast that UK GDP will slow to 0.9% in 2026 from 1.4% in 2025. The report cites renewed energy inflation caused by the US-Israel war with Iran as a key factor weakening growth prospects by weighing on households and firms. It also highlights regional disparities holding back living standards and urges the government to accelerate its pro-growth agenda. The report comes as Andy Burnham is set to replace Keir Starmer as prime minister next week and plans to introduce a 'No 10 North' based in Manchester to devolve power. Chancellor Rachel Reeves commented that the economy is in a stronger position than two years ago.
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