LONDON, Dec. 4 (Xinhua) -- The Organisation for Economic Co-operation and Development (OECD) has upgraded its forecast for the United Kingdom's (UK) economic growth in 2025, raising its estimate from 1.2 percent to 1.7 percent, according to a report published on Wednesday.
The upward revision is attributed to increased government spending, which is expected to stimulate economic activity. However, the OECD warns that this growth could come at the cost of higher inflation and may be offset by the impact of elevated taxes.
While the UK's growth prospects have improved, they remain behind major economies such as the United States and Japan. However, the UK is forecast to outpace other Eurozone countries, including Germany and France, which are predicted to experience slower recoveries in 2025.
Inflation remains a concern in the UK, reflecting trends in other advanced economies but declining more slowly than in the US and Eurozone. While core inflation in these regions is expected to reach targets by 2026, the UK's outlook remains uncertain.
During Prime Minister's Questions, Keir Starmer sidestepped questions from opposition leader Kemi Badenoch regarding whether the Labour government would fulfill its manifesto pledge to make the UK the fastest-growing economy in the G7. Starmer's lack of a direct response has sparked criticism, raising doubts about the government's ability to meet its ambitious economic goals.
Despite the OECD's optimism, other institutions remain more cautious. Goldman Sachs, for instance, predicts UK GDP growth of just 1.2 percent in 2025, falling short of both the OECD's and the Bank of England's projections. ■
