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The club of rich nations expects Britain’s economic growth to drop sharply from a rate of 1.5 per cent in 2017 — placing the UK at the bottom of the G7 group of countries — to 1.2 per cent in 2018 and 1.1 per cent in 2019.
The OECD’s forecast for 2018 and 2019 is well below the downgraded estimate issued by the Office for Budget Responsibility alongside chancellor Philip Hammond’s Budget last week, and highlights how the organisation believes Brexit will weigh heavily on Britain’s economic performance.
If its forecast through to 2019 is correct, said the OECD, “this pace of growth will not be sufficient to prevent a moderate rise in the unemployment rate” in the UK. The OECD advised the Bank of England, which this month raised interest rates for the first time in a decade, not to tighten monetary policy further because “wage pressures are low and monetary policy should continue to be supportive amid the ongoing slowdown in the economy induced by Brexit”.
Consumers were more stretched in Britain than in most other similar economies, it said, and disagreed with the BoE by saying that growth in consumer debt “is a major financial stability risk”. [...]
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