Rachel Reeves Has Just Been Handed Even More Bad News About The State Of The Economy

Rachel Reeves has just been handed some more bad news about the state of the economy – just weeks before she will deliver her make-or-break Budget.

The highly-respected OECD think-tank forecast that the UK will have the highest rate of inflation of any major economy this year.

In a further blow to the chancellor, the organisation also predicted that the economy will grow by just 1% in 2026, down from 1.4 this year.

That is despite Labour repeatedly pledging to have the highest growth in the G7 when the party was still in opposition.

What’s more, the OECD say the government’s own policies of higher taxes and reduced public spending for the gloomy economic outlook.

The grim findings come ahead of the Budget on November 26, when Reeves is expected to further increase taxes as she tries to plug a black hole of up to £50 billion in the public finances.

According to the OECD’s global economic outlook published on Tuesday, soaring food prices will see inflation in the UK reach 3.5% in 2025, 0.4 percentage points higher than its previous forecast and almost double the Bank of England’s target of 2%.

That would be the highest inflation of any country in the G7 group of advanced economies.

They said the UK was being held back by the government’s “tighter fiscal stance”, meaning higher taxes and lower public spending.

Donald Trump’s decision to impose huge import tariffs on goods entering the US are also damaging growth, the OECD said.

The chancellor tried to put a positive spin on the figures, insisting that they “confirm that the British economy is stronger than forecast” and was the fastest growing of any G7 economy in the first six months of 2025.

She added: “But I know there is more to do to build an economy that works for working people – and rewards working people. That is what I’m determined we deliver through our plan for change.”

Shadow chancellor Mel Stride said the OECD report “confirms Labour has put Britain in a high tax, high inflation, low growth doom loop”.

He added: “Rachel Reeves thinks the solution is more tax rises. The UK is now on the edge of stagflation, all driven by Labour’s economic mismanagement.”