The UK economy will deliver the worst performance of all G7 countries next year, according to the Organisation for Economic Co-operation and Development (OECD).
OECD said in its latest global economic outlook report that the UK’s economy will contract by 0.4% in 2023, more than any other country.
The Paris-based body said that the UK’s weaker performance was down to “reduced purchasing power and tighter monetary policy are expected to take a toll on consumer spending and rising long term interest rates will lead to a slowdown in the housing market.”
Latest official figures for UK gross domestic product (GDP) showed a decline of 0.2% for the economy in the three months between July and September.
The economy is expected to slide into a recession by the end of this year and, following the forecast of a 0.4% decline next year, will make a weak recovery in 2024, according to OECD, which forecast 0.2% growth for the year after next.
Last week, alongside chancellor Jeremy Hunt's autumn statement, the Office for Budget Responsibility forecast the UK economy entered a recession in the third quarter and that it will last "just over a year", with a peak-to-trough fall in GDP of 2%. For 2023 OBR forecasts a 1.4% decline in GDP, rising to 1.3% in 2024.
Out of the other G7 countries, OECD forecasts Germany’s economy will shrink 0.3% in 2023.
However, Japan’s GDP is expected to grow by 1.8%, with Canada growing by 1%, the US 0.5%, France 0.6% and Italy 0.2%.