The British economy will flatline next year as the war in Ukraine and soaring energy prices wreak havoc around the world, according to a report.
The Organisation for Economic Co-operation and Development (OECD) expects the UK to grow by 3.4 per cent this year – down from an earlier prediction of 3.6 per cent.
But it predicts no growth next year due the ‘declining real incomes and disruptions in energy markets’.
The Organisation for Economic Cooperation and Development expects the UK to grow by 3.4% this year – down from an earlier prediction of 3.6%
The outlook in Germany is even bleaker, with growth of 1.2 per cent this year set to be followed by a contraction of 0.7 per cent in 2023.
In the eurozone, growth is expected to slow from 3.1 per cent this year to 0.3 per cent.
Global output next year is projected to be £2.6trillion 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 recession.
The OECD said: ‘The world economy is paying a high price for Russia’s unprovoked, unjustifiable and illegal war of aggression against Ukraine.
‘With the impacts of the pandemic still lingering, the war is dragging down growth and putting additional upward pressure on prices, above all for food and energy.
In many economies, inflation in the first half of 2022 was at its highest since the 1980s. With recent indicators taking a turn for the worse, the global economic outlook has darkened.’
Global growth will slow from 3 per cent this year to 2.2 per cent next year. UK inflation is expected to average 5.9 per cent in 2023. It is currently 9.9 per cent.
This post first appeared on Dailymail.co.uk
