British Economy Will Grow by Merely 1.3 Percent, Says OECD

The global economy is expected to grow at a slower pace this year, with the Organization for Economic Co-operation and Development (OECD) warning that rising trade barriers—particularly under U.S. President Donald Trump's return—are significantly holding back growth.

In its latest outlook, the OECD downgraded its global forecast from 3.1% to 2.9%, describing the outlook as “modest” and warning that nearly every country will feel the effects.

Trump’s tariffs at the centre of slowdown

The OECD squarely blamed Trump’s renewed use of tariffs for the downgrade. Since returning to office, the U.S. president has imposed new tariffs on a long list of countries, creating widespread uncertainty among global businesses.

"We are forecasting basically a downgrade for almost everybody," said Alvaro Pereira, the OECD’s chief economist, in an interview with the BBC. "We'll have a lot less growth and job creation than we had forecasted in the past."

While Trump has insisted on social media that “Because of Tariffs, our Economy is BOOMING!”, the latest official U.S. data tells a different story. The U.S. economy shrank by an annualised 0.2% in the first quarter of this year—the first contraction since 2022. The OECD also cut its U.S. growth forecast for 2025 from 2.2% to 1.6%, and expects it to slow even further in 2026.

UK forecast downgraded amid broader global concerns

Britain isn’t immune to the downturn. The OECD reduced its UK growth forecast for 2025 to 1.3%, down slightly from 1.4% predicted earlier this year. It also revised its 2026 forecast down to 1%, from 1.2%.

The report notes that UK growth is being “dampened by heightened trade tensions” and “elevated uncertainty.” But it also points to domestic challenges, such as the country’s “very thin” financial buffer and high levels of government debt interest payments.

The OECD suggested that Britain should consider raising tax revenues to help “strengthen the public finances.”

A ripple effect across the globe

The report warns that weakened economic prospects will be felt “around the world, with almost no exception.” Inflation risks remain high, particularly in the U.S., despite earlier promises by Trump that inflation would come down during his second term.

The OECD’s message is clear: unless countries ease trade restrictions and restore certainty to global markets, the world faces a period of slower growth, fewer jobs, and increased financial vulnerability.