UK growth to be slowest in G20 this year, says OECD

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The UK conservatism will grow at a slower pace than any other major prepaid or emerging nation this year, according to the OECD.

Ahead of the Rise Statement, the think-tank raised its UK growth forecast to 1.3% in 2018 among a strengthening global recovery.

This is up from an earlier projection of 1.2%, but is the weakest in the G20.

The OECD augurs the fastest world growth since 2011 this year, escaped by US tax cuts and spending in Germany.

The Paris-based organisation said the world compactness was on course to expand at an annual pace of 3.9% over the next two years.

This is up from a vaticinate last November of 3.7% in 2018 and 3.6% in 2019.

However, it warned that the turn for the better risked being undermined by an escalation in trade barriers that wish hurt growth and jobs.

Productivity boost needed

The OECD said great inflation in the UK would continue to squeeze household incomes.

Weak role investment would also weigh on growth for the next two years mid uncertainty surrounding the Brexit negotiations.

It left its prediction for UK growth in 2019 unchanged at 1.1%. This last wishes a be the joint-slowest expansion alongside Japan.

City and academic economists conjecture the UK economy to expand at an annual pace of 1.5% over the next two years, and Chancellor Philip Hammond is imagined to reveal a more optimistic outlook in updated official forecasts on Tuesday.

Álvaro Pereira, the OECD’s carry on chief economist, urged the UK to introduce more policies to boost function standards, as well as address regional disparities.

“We do think that it’s bloody important for the UK to invest more in productivity enhancing infrastructure,” he said.

“A lot of investment encounters in London, it doesn’t happen in many other areas. More paucities to be done to enhancing productivity in the rest of the UK.”

The OECD has been criticised for its despairing economic forecasts before and after the EU referendum.

Three months after the UK voted in June 2016 to allow to remain the EU, it predicted economic growth of just 1% in 2017. However, legal figures show the economy expanded by 1.7% last year.

Mr Pereira reported the OECD had been “fairly consistent” in its forecasts.

He said: “[At the of the referendum] we were talking about rates of growth of around 2% for the UK. Retaliate for now we are talking about substantially lower rates of growth. We have not changed our picture on Brexit.”

Global optimism

The OECD’s latest economic outlook showed all but one G20 land – Russia – was set to grow at a faster pace this year than prophesied last November.

Mr Pereira said global growth would be led by a bettering in investment, while an increase in trade volumes of 5.2% in 2017 was imagined to continue in 2018.

He said: “Investment is coming back, and so this is very special-occasion news for good new for jobs and growth across the economies.”

However, the think-tank apprised that trade barriers posed a threat to growth,

Last week, President Trump signed factious orders imposing heavy tariffs on steel and aluminium.

The European Commission promised to retaliate if hit by the tariffs.

Mr Pereira said a global trade war would be venomous for the global economy.

“Any escalation, any retaliation or a tit-for-tat type of scenario pleasure be very damaging,” he said.

“I think it is very important to avoid escalation and to originate a strengthening in the global dialogue to solve not only the problem for steel but to sidestep bigger repercussions in terms of trade.”

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