OECD cuts UK growth forecast to 2.1 per cent as it warns “urgent” policy changes are needed to increase global growth
One of the world's most influential economic think tanks has slashed the UK's growth by 0.3 percentage points, as it warned an "urgent" change to are needed from policymakers to push up global growth.
The organisation said it expected UK growth to reach 2.1 per cent this year, compared with 2.4 per cent it previously expected, falling to two per cent in 2017. Meanwhile, global growth will hit three per cent this year and 3.3 per cent next year.
It said the global growth figure was "lower than would be expected during a recovery phase for advanced economies".
"Financial instability risks are substantial, as demonstrated by recent falls in equity and bond prices worldwide, and increasing vulnerability of some emerging economies to volatile capital flows and the effects of high domestic debt," it said.
Catherine L Mann, the OECD's chief economist, warned that growth prospects have "practically flat-lined".
“Recent data have disappointed and indicators point to slower growth in major economies, despite the boost from low oil prices and low interest rates.
"Given the significant downside risks posed by financial sector volatility and emerging market debt, a stronger collective policy approach is urgently needed, focusing on a greater use of fiscal and pro-growth structural policies, to strengthen growth and reduce financial risks.”
Meanwhile, China's growth was expected to be 6.5 per cent this year and 6.2 per cent next year, while US growth will hit two per cent this year and 2.2 per cent in 2017.