UK 'will face worst downturn of major economies' in 2023, says OECD

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The UK faces the worst downturn of major economies next year and is preparing for a recession that much of the rest of the world will avoid, according to a new report from the Organization for Economic Co-operation and Development (OECD).

The global economic think tank has sharply lowered its forecast for the UK economy, predicting that it will contract by 0 .4% in 2023 and will grow only 0.2% in 2024 As late as September, he expected GDP to stagnate next year.

And he put warns of the risk of a deeper downturn if consumers respond to soaring energy and housing costs by reining in spending, removing demand from the economy, while strikes and shortages labor could drive up prices further by fueling wage inflation.

< p>The OECD has blamed labor shortages and “untargeted” energy support for painful inflation, which is expected to peak at the end of this year at its current level of 11.1% and stay above 9% in early 2023, before slowing to 4.5% by the end of next year and 2.7% in 2024.

His report forecasts that interest rates in UK will rise further from 3% currently to 4.5% by April next year, while unemployment will rise from 3.6% to 5% by the end of 2024.

Among the G7 group of most developed countries, only Germany is expected to join the UK in seeing a contraction in income next year, with GDP down 0.3%.

En In contrast, the United States will expand by 0.5%, with GDP expected to grow by 0.6% in France, 1% in Canada and 1.8% in Japan.

And l 'OECD has said that much of the rest of the world will avoid recession as the Bank of England and the Offi ce for Budget Responsibility plan to extend until 2024 in the UK.

The OECD's acting chief economist, Alvaro Santos Pereira, said the world is currently facing "a very difficult economic outlook", but global growth is nonetheless expected to be 2.2% in 2023.

"Our central scenario is not a global recession, but a significant slowdown in global economic growth in 2023, as well as continued high inflation, although declining, in many countries," he said.

Labour Treasury spokeswoman Abena Oppong-Asare said: "The fact that the UK economy being the most affected by the energy crisis among the G7 countries is a direct consequence...