UK to suffer worst in G7 from energy crisis – OECD
The UK economy will contract more than any of the world’s seven most advanced nations next year as Britain suffers from painful inflation exacerbated by worker shortages and “untargeted” energy support, according to a report.
The latest forecasts from the Organisation for Economic Co-operation and Development (OECD) reveal a sharp downgrade for the UK economy, which is expected to shrink by 0.4 per cent in 2023 and grow by just 0.2 per cent in 2024.
It had predicted in september that UK growth would flatline in 2023.
Germany is the only other G7 country set to see a contraction in gross domestic product (GDP) next year, with a 0.3 per cent drop, according to the report.
Italy will see only paltry growth of 0.2 per cent, while the United States will eke out 0.5 per cent expansion, with GDP set to rise by 0.6 per cent in France and 1 per cent in Canada and 1.8 per cent in Japan.
The UK is also the third worst performing nation of all the G20 advanced countries worldwide, with only Russia and Sweden seeing a bigger decline in GDP, at 5.6 percent and 0.6 percent.
When compared with the average of all the world economies, the UK'S performance is set to trail behind the 2.2 per cent in global growth predicted for next year, but this is still a sharp slow down on the 3.1 percent expected in 2022 due to the energy crisis and trading sanctions sparked by Russia's war on Ukraine.
Theoecd also said efforts to cap energy bill sat around £2,500 until April will push up inflation and mean households and businesses will be hit by higher interest rates policymakers look to rein in price and wage rises.