Growth figures for the UK are likely to fall behind those of other rich nations like the United States and Canada, according to the latest economic outlook report by the OECD published today.
The UK’s economy will also trail behind other fast-growing ones, such as China's and India's, the report showed, which projected growth figures for economies across the world.
Economic growth in the EU area as a whole is also expected to outperform the UK’s.
Growth in the UK economy will remain “sluggish”, projected at 1.5% this year, falling back to 1.2% in 2018 and again in 2019 to 1.1%.
Brexit is identified as one explanation for the poor performance, with slow growth partly a result of “continuing uncertainty over the outcome of negotiations around the decision to leave the European Union”, the OECD said, as well as falling purchasing power caused by inflation.
These projections come after the chancellor’s Budget last week, in which expectations for UK growth were also downgraded from previous forecasts.
The chancellor, drawing on analysis by the Office for Budget Responsibility, said that economic growth will remain at or below 1.5% until 2021 at least.
The OECD argued that the world economy has strengthened from previous years and will see slight improvements in growth rates in 2018.
Although, it also warned that economic performance is still weaker overall than a decade ago, and “remains below the pre-crisis period and that of past recoveries”.
“Growth has picked up momentum and the short-term outlook is positive, but there are still clear weaknesses and vulnerabilities,” said OECD secretary-general Angel Gurria.
Gurria added that slow wage growth around the world continued to frustrate and surprise the OECD.
“The weakness of productivity growth is particularly puzzling given the ongoing digital revolution, which should be unlocking efficiencies and allowing each worker to produce more,” he said.
The report also showed the US economy is projected to fall back by 2019, despite President Donald Trump’s bullish claims about the impact of recent reforms.
The OECD analysis showed US growth hitting 2.5% by 2018 but then dropping again to 2.1% the year after that.
