The UK is expected to experience the highest inflation among G7 countries in 2025.
The Organization for Economic Co-operation and Development (OECD) has raised its forecast for the UK inflation to 3.5% in 2025.
This increase is manly due to rising food prices. The UK’s economy is expected to grow by 1.4% this year, according to the OECD but it may slow next year.
This report comes as Chancellor Rachel Reeves prepares the November Budget where she might increase taxes or reduce spending to keep government borrowing under control.
The OECD now expects UK inflation to be 3.5% in 2025, up from earlier estimate of 3.1%.
Inflation is expected to fall to 2.7% in 2026 which would still be the second-highest among G7 countries.
Meanwhile, UK economic growth is predicted to slow to 1% next year, the same as the OECD’s previous forecast in June.
OECD predicts the UK's economy will slow down due to stricter government policies such as higher taxes or reduced spending along with rising trade cost and uncertainty.
UK inflation was 3.8% in August, mainly due to increasing food prices.
The OECD’s latest forecast notes that the UK is among several countries experiencing rising food costs.
