UK growth forecast slashed to 1% as inflation pressures mount

Summarised from 3 outlets · 4 reports · Updated 28 Oct, 13:44 · Archive

The Office for Budget Responsibility has cut its forecast for UK economic growth next year from 1.6% to 1%.

The Office for Budget Responsibility has sharply cut its forecast for UK economic growth next year to 1%, down from a previous estimate of 1.6%. The watchdog cited accelerating inflation putting pressure on households and businesses as the reason for the downgrade, published alongside the autumn Budget.

Chancellor John Healey warned of the impact of 'global economic storms' linked to the Iran war on the economy. Growth this year is now expected to reach 1.2%, up slightly from a previous forecast of 1.1%.

The watchdog predicts growth will recover to 1.6% in 2028, then rise to 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031. Healey also confirmed that fiscal headroom will be reduced to £15 billion in 2029/30, down from a previous prediction of £26 billion, after borrowing costs jumped by £14 billion over the past year. The headroom is expected to improve to £22 billion by 2031.

How it is being reported

• Economic Growth Set To Slow Next Year Despite Burnham Pledges, Watchdog WarnsThe UK growth forecast has fallen to 1% for next year, according to the country’s public finances watchdog. In a new report published on Wednesday along with the first Budget of Andy Burnham’s government, the Office for Budget Responsibility ( OBR ) predicted rising inflation would slow down anticipated economic growth. While UK gross domestic product (GDP) is expected to improve by 1.2% this year – up from an estimate of 1.1% – it will go down in 2027. The OBR previously predicted the UK economy would grow by 1.6% next year. The forecast is also a blow to the government, which has vowed to…HuffPost UK · 28 Oct, 14:51
• UK growth forecast slashed to 1% for next year. Here’s how it could affect youUK gross domestic product (GDP) is set to improve by 1.2 per cent this year but slow in 2027The Independent · 28 Oct, 13:56
• UK growth forecast slashed to 1% for next year amid Iran war impactThe Office for Budget Responsibility said UK gross domestic product (GDP) is set to improve by 1.2% this year and slow in 2027.Independent Business · 28 Oct, 13:20
• UK growth forecast slashed to 1% for next year amid Iran war impactThe Office for Budget Responsibility said UK gross domestic product (GDP) is set to improve by 1.2% this year and slow in 2027.Evening Standard · 28 Oct, 13:20

In this story: Office for Budget Responsibility · John Healey · United Kingdom

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