OECD Forecasts UK Inflation to be the Highest in G7 in 2025

The influential and trusted Organisation for Economic Co-operation and Development (OECD) has forecast that UK inflation for 2025 will finish the year at the largest level of all the 7 largest world economies (G7) at 3.5% pa.

This is a bleak forecast for the UK and will mean longer pain with higher cost of living increases for us all, price rises continuing and interest rates will therefore also need to remain higher than our EU neighbours.

Yes, we have lower US tariffs than the rest of the world but our food and power needs do not come from the USA.

Comment

Higher inflation and higher interest rates will mean more pain for us, lower economic growth and therefore, lower tax revenues for the government.  Add to this, a weakening £ already means our imports are more expensive than they were last year and will continue be more expensive.  We are in a ‘vicious circle’ at present.

This will mean ever higher taxes with fears for the Autumn Budget well documented.  Some commentators have even suggested that the UK is becoming more ‘communist’ in its adminstration and taxation rather than a ‘capitalist’ nation.

We can see no end in sight without the Chancellor taking action to boost the economy.  We cannot keep borrowing and building up our ‘national credit card’ balance without improving our income to pay it off.  The Chancellor needs to consider cutting expenditure that we can ill-afford and incentivise businesses to grow. 

Nigel Farge (love him ot hate him) has even suggested that without drastic action the UK will be bankrupted and whilst we and many may not agree with all his headline grabbing ‘news bites’, never forget that it was the UK that was in fact technically ‘bankrupt’ in 1975, at the time it was also a Labour Prime Minister, Harold Wilson, in power and the UK needed a bailout, just like Greece and Ireland did a few years ago.

It was also not so long ago on the 6^th April 2010, that a note was left by Labour’s Liam Byrne, the outgoing Chief Secretary to the Treasury, intended for his successor, the incoming Chief Secretary in the newly formed coalition government saying “I am afraid there is no money left”.

The point we are making is that it is not unknown for the UK to need ‘bailing out’ and the current Labour Chancellor needs to stimulate UK businesses and the economy in the Autumn Budget 2025 rather than penalise it with ever higher taxes, less recuitment, more redunancies and likely recession.  You cannot spend what you have not got.