{"id":44236,"date":"2024-12-06T10:13:42","date_gmt":"2024-12-06T10:13:42","guid":{"rendered":"https:\/\/kede.com.br\/news\/uk-interest-rates-higher-for-longer-due-to-budget-says-oecd\/"},"modified":"2024-12-06T10:13:43","modified_gmt":"2024-12-06T10:13:43","slug":"uk-interest-rates-higher-for-longer-due-to-budget-says-oecd","status":"publish","type":"post","link":"https:\/\/kede.com.br\/news\/uk-interest-rates-higher-for-longer-due-to-budget-says-oecd\/","title":{"rendered":"UK interest rates higher for longer due to Budget, says OECD"},"content":{"rendered":"
UK interest rates will fall more slowly than expected over the next two years due to October’s Budget, according to an influential think tank’s forecasts.<\/p>\n
Although Budget measures would boost the economy in the short-term, changes to tax and spending would mean the cost of borrowing would fall more slowly, the Organisation for Economic Co-operation and Development (OECD) said.<\/p>\n
The measures are also likely to push UK inflation, which measures how prices rise over time, above the rate seen in other major economies.<\/p>\n
Chancellor Rachel Reeves welcomed the forecast, however, saying “growth is our number one priority”.<\/p>\n<\/div>\n
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The OECD now expects the UK economy to grow more slowly this year than it forecast three months ago, before accelerating rapidly next year and slowing again in 2026.<\/p>\n
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It expects 0.9% growth this year, down from 1.1%<\/li>\n
It predicts 1.7% next year, up from 1.2%<\/li>\n
In 2026, it expects 1.3% growth<\/li>\n<\/ul>\n
Reeves said the upgrade in the growth forecast for 2025 “will mean the UK is the fastest growing European economy in the G7 over the next three years”.<\/p>\n
She said Labour had not taxed people\u2019s payslips at the Budget and that the government is “determined to deliver growth”.<\/p>\n
In October, Reeves set out plans to increase public spending by nearly \u00a370bn per year, funded through tax rises and more borrowing.<\/p>\n
On Wednesday, the OECD said that UK interest rates, which currently stand at 4.75%, are expected to fall back to 3.5% by early 2026.<\/p>\n
It said that this was partly due to higher than expected inflation.<\/p>\n
The OECD’s economic predictions are released twice per year, and aim to give a guide about what is most likely to happen in the future. But they can be off the mark, and they do change.<\/p>\n
Businesses use the estimates to help plan investments, and governments use them to guide policy decisions.<\/p>\n<\/div>\n
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