OBR slashes the UK's growth forecast to 1% for 2027 and sees inflation peaking around 3.75%

Summary

The Office for Budget Responsibility said UK gross domestic product (GDP) is set to improve by 1.2% this year and slow in 2027, the UK growth forecast being slashed to 1% for next year amid the impact of the Iran war, the Evening Standard and The Independent reported on Wednesday 28 October, the day of the Budget. UK inflation is set to rise to a peak of around 3.75% by the start of next year, the OBR said, inflation being set to surge beyond forecasts as the UK economy is set for a growth slowdown, according to the two outlets, which also reported that the tax burden is set to reach a record high while growth in living standards is at an all-time low. The Guardian reported that the OBR slashed the 2027 growth forecast despite Healey's budget measures, the outlook for living standards also being downgraded, HuffPost UK that growth is expected to return to 1.6% in 2028 and that inflation will reach 3.4% in 2027 and only return to the Bank of England's 2% target in 2030, and the Financial Times that fiscal drag is set to hit taxpayers harder than previously thought. BBC News reported the OBR saying higher energy prices will impact everything from prices and living standards to economic growth.

Latest: The Office for Budget Responsibility slashed the UK growth forecast for 2027 to 1%, GDP being set to improve by 1.2% this year, and said inflation is set to rise to a peak of around 3.75% by the start of next year, the Evening Standard and The Independent reported, the two outlets adding that the tax burden is set to reach a record high, while The Guardian reported that the outlook for living standards was also downgraded.

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