UK interest rates<\/strong> are expected to decline at a slower pace than previously forecast, influenced by the tax increases<\/strong>, expanded public spending<\/strong>, and elevated borrowing<\/strong> outlined in Rachel Reeves\u2019 autumn Budget. The Organisation for Economic Co-operation and Development<\/strong> (OECD) projects that interest rates, currently at 4.75%, will drop to 3.5% by early 2026. However, the anticipated decrease is less steep due to heightened consumer spending triggered by fiscal policies<\/strong>.<\/p>\n
UK GDP<\/strong> is now forecast to grow by 0.9% in 2023, a slight downgrade from the earlier projection of 1.1%, following weak third-quarter growth of 0.1%. Despite this short-term dip, the economy is expected to strengthen, with GDP growth<\/strong> predicted to reach 1.7% in 2024, driven by significant public spending<\/strong> increases. Growth is projected to moderate to 1.3% in 2026.<\/p>\n
The autumn Budget introduced nearly \u00a370 billion in additional annual public spending<\/strong>, supported by tax hikes<\/strong><\/a> and increased borrowing. The OECD highlighted that while fiscal policy<\/strong> will tighten over 2024\u20132026, the scale of tightening is less severe than previously anticipated due to these expansive measures. The report emphasized the interplay between fiscal stimulus<\/strong> and broader economic trends, noting its impact on growth<\/strong> and inflation.<\/p>\n
On a global scale, the OECD expects economic growth<\/strong> of 3.2% in 2023 and 3.3% in 2024, marking slight upgrades from previous forecasts. Despite acknowledging substantial risks<\/strong> and uncertainties, the organisation underscored the resilience<\/strong> of the global economy over the coming years.<\/p>\n
These projections offer a cautiously optimistic view of the UK<\/strong> and global economies, highlighting the interplay of fiscal policy<\/strong>, inflation<\/strong><\/a>, and growth in shaping economic prospects.<\/p>\n","protected":false},"excerpt":{"rendered":"