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Chancellor Jeremy Hunt said: “Today the OECD have set out a challenging global picture, but it is good news that they expect UK inflation to drop below 3pc next year.
“It is only by halving inflation that we can deliver higher growth and living standards. We were among the fastest in the G7 to recover from the pandemic, and the IMF have said we will grow faster than Germany, France, and Italy in the long term.”
The OECD upgraded its forecast for global growth this year from 2.7pc to 3pc.
However, it downgraded its prediction for 2024 from 2.9pc to 2.7pc and warned that the global outlook could get much worse as the toll of successive interest rate rises ripples through the world economy.
It said in its report: “Risks remain tilted to the downside. Uncertainty about the strength and speed of monetary policy transmission and the persistence of inflation are key concerns.
“The adverse effects of higher interest rates could prove stronger than expected, and greater inflation persistence would require additional policy tightening that might expose financial vulnerabilities.”
Across the Euro area, the Paris-based group said it expected GDP to grow by 0.6pc in 2023 and 1.1pc in 2024.
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