Cliff Notes
- The OECD has downgraded global economic growth forecasts, attributing the slowdown to US President Trump‘s tariffs on imports, with the UK expected to grow only 1.4% this year, down from 1.7%.
- The UK is projected to be “Europe‘s fastest growing G7 Economy,” despite a January GDP contraction, as Chancellor Rachel Reeves highlights increased global headwinds affecting growth.
- While the Eurozone faces tariff impacts, they are less severe than initially anticipated; however, uncertainty from heightened geopolitical tensions continues to restrain overall growth.
Tariffs to blame for slowed global economic growth, OECD says
Global economic growth has been downgraded by the Organisation for Economic Co-operation and Development (OECD) – as the impact of US President Donald Trump’s tariffs becomes apparent.
Major economies including the UK will have lower rates of GDP – a measure of an economy’s value and everything produced – due to the US’s imposition of taxes on some goods it imports, the Paris-based OECD club of 38 rich countries said.
The UK economy will grow only 1.4% this year, as opposed to the 1.7% previously anticipated.
Next year, the figure will be 1.2%, lower than the 1.3% forecast before Mr Trump took office in January, according to the OECD interim economic outlook.
UK economy unexpectedly shrank
It’s more unwelcome news for Chancellor Rachel Reeves after January GDP unexpectedly shrank. The government have repeatedly said growing the economy is their number one priority.
In response to the OECD figures, Ms Reeves pointed out the UK is forecast to be “Europe’s fastest growing G7 economy over the coming years – second only to the US”.
“This report shows the world is changing, and increased global headwinds such as trade uncertainty are being felt across the board.”
