Economic growth in the UK is set to beat initial expectations this year, placing it joint second among the G7 developed countries, behind only the US.
In its latest outlook, the Organisation for Economic Cooperation and Development (OECD) hiked expectations for UK economic growth in 2024 to 1.1% from 0.4% previously.
This would place the UK on par with Canada and France and ahead of Japan, Italy and Germany after previously being forecast in May to lag behind all G7 counterparts.
Globally, the world economy was predicted to grow by 3.2% this year, against the OECD’s last projection of 3.1%, with the organisation noting “a corner” had been turned.
“Declining consumer price inflation has supported household spending,” the OECD said.
“[This has] counterbalanced the negative impact from restrictive financial conditions and the uncertainty about the ongoing war in Ukraine and the evolving conflicts in the Middle East.”
Among the G7, OECD downgraded growth forecasts for the Japanese and German economies to -0.1% and 0.1% respectively, with the latter facing lacklustre industrial output and declining sentiment.
The UK is set to face headwinds from higher prices though, the OECD warned, with inflation expected to climb to 2.7% by the year-end and outpace the wider G7 in 2025.