UK economy to flatline as Ukraine war and the cost of soaring energy prices take their toll
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UK economy flattens as war in Ukraine and costs of rising energy prices take their toll
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Britain’s economy will flatten next year as the war in Ukraine and rising energy prices around the world wreak havoc, a report said.
The Organization for Economic Co-operation and Development (OECD) expects the UK to grow by 3.4 percent this year – down from an earlier forecast of 3.6 percent.
But it predicts no growth next year due to “falling real incomes and disruptions in energy markets.”
The Organization for Economic Co-operation and Development expects the UK to grow by 3.4% this year – down from a previous forecast of 3.6%
The outlook in Germany is even bleaker, with growth of 1.2 percent this year, followed by a contraction of 0.7 percent in 2023.
In the eurozone, growth is expected to slow from 3.1 percent this year to 0.3 percent.
Global output next year is expected to be £2.6 trillion less than the OECD forecast before Russia invaded Ukraine – a loss close to the size of the UK economy.
The report, Paying the Price of War, came as Germany’s Ifo Institute said it was heading for a recession.
The OECD said: “The world economy is paying a heavy price for Russia’s unprovoked, unjustified and illegal war of aggression against Ukraine.
“With the effects of the pandemic still continuing, the war is holding back growth and putting additional upward pressure on prices, especially for food and energy.
In many economies, inflation in the first half of 2022 was at its highest level since the 1980s. With recent indicators deteriorating, the outlook for the global economy has darkened.’
Global growth will slow from 3 percent this year to 2.2 percent next year. Inflation in the UK is expected to average 5.9% in 2023. Currently it is 9.9 percent.