Inflation to surge and growth to drop in fresh economic blow to Reeves
Rachel Reeves, in front of the autumn budget, high taxes and expenditure policies will prevent economic growth and will lead to an increase in inflation, he said.
Economic Cooperation and Development Organization (OECD) Britain’s “more strict financial stance” growth will be seen sharply from 1.4 percent to 2026 this year.
Economists from effective organization, also Donald TrumpTariffs will give UK one of the highest inflation rates in the G7 leading economies.
The results are coming because Mrs. Reeves is under pressure to increase more taxes in the budget to close a black hole in her expenditure plans, which are believed to be around 40 billion pounds.
For a chances of bringing economic growth last year with the “No one”, the report provides difficult reading.
He warned that inflation in the UK was 3.5 percent this year, 0.4 points higher than previous estimates, and still in 2026, the UK Bank’s target remained far above 2.7 percent and rising food prices increased the cost of life.
According to the report, Britain would see that the next year had the second highest inflation rate in the G7.
OECD has dragged the estimation of 2025 for the UK Gross Domestic Product (GDP) from 1.3 percent in June, while it did not change the appearance that would mean a steep retreat in growth during the next year.
However, a challenging lady Reeves said: “These figures confirm that the British economy is stronger than the forecasts – the fastest growth of any G7 economy in the first half of the year.
“But I know that there is more to build an economy that works for working people – and rewarding people. I am determined to present through our change plan.”
However, the Sir Mel Stide of Tor Shadow Chancellor said: “OECD confirms what hard -functioning families already feel – England under labor, high inflation, low growth apocalypse cycle.
“Rachel Reeves seems to think that the solution is more tax increase.
“This must be a call for a wake up for the chancellor: you cannot tax your way to grow.”
And with the Labor Party, which will start its conference next week, it is pressure on the chancellery to bring about retirement, savings and property on the left of the party and trade unions.
In the meantime, there are suggestions to apply national insurance to the rents collected by hiring, gambling tax and hosts on the bank profit.
Overnight, former Principal Torsten Bell, now a Treasury minister, proposed to cut the national insurance with 2P and add 2P to income tax.
However, the debate continues against a challenging economic past for the workers’ government.
OECD also warned that growth in the world economy will weaken in the rest of the year as higher US tariffs entered into force by reducing global trade and investment.
It was stronger than expected in the first half of the global economy in the first half of the 2025, but the activity said, “It will significantly soften in the second half of this year”.
The reason for this is partly refers to imports of imports in the first half-providing support to the production and trade of goods arising from the “front loading”.
This happened as the enterprises made more referrals before Mr. Trump’s policy changes before more upright taxes in their exports.
OECD meant that in the first half of the industrial production growth in the first half of 2025, most of the developed economies exceeded the average of 2024.
Strong investment levels for technology sectors, especially AI, supported activities in the USA and Japan.
However, as the front loading arrives at the stop, higher tariffs come into force and permanent uncertainties reduce investment and trade, and economic growth is expected to slow down.
OECD said the trade between the US and China, the two largest economies in the world, has fallen sharply in recent months.
Global GDP is expected to decrease from 3.3 percent in 2024 to 3.2 percent in 2025 and 2.9 percent in 2026.
However, the figure of 2025 is 0.3 points higher than the previous prediction of OECD in June.
The OECD said that spending and tax elections for governments around the world should focus on the need to kaç The need to strengthen sustainable economic growth while maintaining sufficient support for those who need it ”.
It was also suggested that central banks should remain “awake ,, but they continue to reduce the interest rates on which inflation is on a downward path.
“OECD’s forecasting growth for England will barely maintain our aging population for England;
“This is a direct consequence of the government’s policy of increasing employment costs and making business more expensive. The government’s time to be serious about growth. The budget offers the opportunity to correct the public finances of the chancelide and to remove our tax system and to increase the burden of the economy and increase economic dynamism.
“When it is combined with radical action, planning and regulatory reform in November, this kind of spoken but rarely moving is the only way to this confusion.”
