The UK’s GDP increased by 1.1% this year, according to the Organization for Economic Co-operation and Development (OECD), outpacing the growth of the euro area as a whole.
Among the 38 member states of the Paris-based group, it represented one of the largest improvements to forecasts.
The OECD warned that despite a slew of shocks in recent years, including the COVID-19 pandemic, Russia’s invasion of Ukraine, and the strife in the Middle East, its predictions remained vulnerable to global events.
The UK upgrade mostly took into account the stronger-than-anticipated performance during the first half of the time.
Economists generally attributed the dip to the effect of interest rate increases by the Bank of England aimed at reducing inflation.
The OECD stated in its update that although slowing, a rapid increase in wages continued to pose a risk to the UK’s inflation forecast.
It also indicated that pressure from the increase of service prices would persist.
The results aligned with the Bank of England’s recent remarks that, in the wake of the interest rate decrease in August from 5.25% to 5%, it would proceed cautiously with additional rate reductions.
