UK GDP growth to hit 1.1% in 2024 – OECD

UK GDP growth is projected to rise to 1.1 per cent in 2024 and 1.2 per cent in 2025, up from 0.1 per cent in 2023, as the economy recovers from a period of weak growth, according to the OECD.

Despite easing energy and food price pressures, core inflation is expected to remain high at 3.7 per cent in 2024 and 2.8 per cent in 2025.

Although substantial government support during the COVID-19 pandemic and the energy price crisis has been reduced, public debt continues to remain elevated.

Future spending pressures are anticipated due to an ageing population and the need for climate transition investments.

The OECD suggests that tax reforms aimed at reducing exemptions and increasing compliance could help rebuild fiscal space and reduce economic distortions.

Low investment has hindered productivity growth, and a clearer government strategy is needed to boost business investment and access to finance for small firms.

Employment growth remains weak, with increased inactivity from long-term sickness. Reforms to work capability assessments, expanded childcare support, and better apprenticeships are recommended to enhance labour force participation.

The UK leads in reducing greenhouse gas emissions, but progress in decarbonising housing needs to accelerate. Strengthening decarbonisation strategies and expanding green financing options could help meet net-zero targets.

Attribution: OECD

Subediting: M. S. Salama