\n<\/p>\n
Chancellor Jeremy Hunt said the OECD’s forecast showed the UK was “winning the war” against inflation.<\/p>\n
“This forecast is not particularly surprising given our priority for the last year has been to tackle inflation with higher interest rates”, he wrote, adding that “growth matters”.<\/p>\n
But Darren Jones, Labour’s shadow chief secretary to the Treasury, said: “Today\u2019s news that growth has been downgraded again reminds the British people what they already know: after 14 years of failure, the Conservatives cannot fix the economy because they are the reason it is broken.”<\/p>\n
Meanwhile, the Liberal Democrats accused the government of being “economically illiterate”.<\/p>\n
“Their no-growth policies have left the public enduring sky-high mortgage rates, the price of a weekly shop going through the roof, and stealth taxes hammering both pensioners and working people,” said Liberal Democrat Treasury spokesperson, Sarah Olney.<\/p>\n
The Bank of England, which is independent from the government, sets interest rates and has a target to keep inflation at or close to 2%. <\/p>\n
Inflation – which measures the pace of price rises – has slowed significantly from a 40-year high it reached in October 2022 to 3.2% in April<\/a>. <\/p>\n Interest rates have been held at 5.25% since last September. The OECD expects the Bank to start cutting borrowing costs from this autumn. <\/p>\n The think tank predicted that interest rates could fall to 3.75% by the end of next year.<\/p>\n The forecasts aim to give a guide to what is most likely to happen in the future, but can be incorrect and do change.<\/p>\n They are used by businesses to help plan investments, and by governments to guide policy decisions.<\/p>\n<\/div>\n