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UK growth this year has been given the biggest upward revision among all the major countries surveyed by the Organisation for Economic Co-operation and Development, which released its latest economic forecasts earlier today.
The OECD now predicts UK growth will hit 1.6 per cent this year, up from its prior prediction of 1.2 per cent in November – an increase of 0.4 percentage points. Canada saw the second largest upgrade of 0.3 percentage points, followed by Japan at 0.2.
No changes were made to the OECD’s overall interim economic prediction for world growth, which remains at 3.3 per cent for 2017 compared to the previous year.
The 1.6 per cent predicted growth rate for the UK in 2017 still lags behind those of other developed countries. The OECD predicts the US and Canada will both expand their economies by 2.4 per cent this year, while German expansion of 1.8 per cent will outpace that of the overall euro area of 1.6 per cent.
The OECD’s outlook for the UK is also gloomier for next year, with the growth rate expected to fall to 1 per cent in 2018 – putting it behind the euro area’s 1.6 per cent and well behind the US at 2.8 per cent and the overall world at 3.6 per cent.
A growth rate of 1.6 per cent this year for the UK economy would also be a slower rate than last year’s 1.8 per cent expansion.
The report said:
In the United Kingdom, the pace of expansion in 2016 was lower than in previous years, despite support from resilient household spending, actions by the Bank of England and adjustment to the fiscal stance following the Brexit vote.
UK growth is expected to ease further as rising inflation weighs on real incomes and consumption, and business investment weakens amidst uncertainty about the United Kingdom’s future trading relations with its partners.