UK to have one of the highest inflation rates in the developed world this year, new forecast shows
Britain will have one of the highest rates of inflation of any major developed economy this year but should narrowly avoid recession, the Organisation for Economic Co-operation and Development (OECD) has said in its latest set of forecasts.
The Paris-based OECD – a club of rich countries – said that inflation in Britain will be higher in 2023 than nearly any of its other members save for Argentina and Turkey.
It warned that higher interest rates are likely to dampen economic growth and incomes in the coming months.
It comes after the chancellor told Sky News he would back the Bank of England to raise interest rates in the coming months to bring inflation under control, even if it pushed the UK into recession.
Like the International Monetary Fund late last month, the OECD has upgraded its forecast for UK economic growth this year and next, so it is no longer the slowest-growing nation in the group of seven leading industrialised economies.
The UK will grow by 0.3% this year and 1% in 2024, the OECD’s Economic Outlook predicted.
But the OECD said there were “significant risks” to its forecast.
“The high interest burden on public debt and the recent drop in average debt maturity leave the public finances exposed to movements in bond yields,” it said – a sign that it remains concerned about the state of the public finances.
“Renewed increases in wholesale energy prices due to Russia’s war of aggression against Ukraine would further squeeze real incomes given the United Kingdom’s high dependence on natural gas. Faster-than-expected resolution of uncertainty regarding future trade relationships is an upside risk.”
The OECD said the UK’s inflation rate should average 6.9% this year, higher than the OECD average and indeed nearly every other country in the developed world.
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Britain’s high inflation is a result of a lack of participation in the labour market, energy prices, and wider supply chain disruptions, OECD Chief Economist Clare Lombardelli told Sky.
It added that there were worrying signs about the rate of inflation in the UK, compared with other countries.
The share of items in the consumer price index “basket” rising by more than 5% a year is now up to more than a third in the UK, compared with under 30% in the euro area, Japan, Canada and the US.
The OECD’s new chief economist Clare Lombardelli, who recently joined from the UK Treasury, said that global growth would be a little bit stronger this year than expected, but at 2.7%, it remained below what might be considered a healthy rate.
“The global economy is turning a corner but faces a long road ahead to attain strong and sustainable growth,” she said.
“Monetary policymakers need to navigate a difficult road. Although headline inflation is declining thanks to lower energy prices, core inflation remains stubbornly high, more so than previously expected… Some economies grappling with stubbornly high core inflation may require additional interest rate increases.”
Responding to the OECD announcement, Chancellor Jeremy Hunt said: “Today’s report boosts our growth forecast, praises our action to help parents back to work with a major expansion of free childcare, and recognises our cuts to business taxes which aim to drive investment.
“But while inflation is still too high, we must stick relentlessly to our plan to halve it this year. That is the only long term way to grow the economy and ease the cost of living pressures on families.”
A man has been given a prison sentence over social media posts in relation to the Southport stabbings.
Geraint Boyce, 43, from Rhondda Cynon Taf, pleaded guilty to publishing threatening material intending to stir up religious hatred.
Boyce has been jailed for two years – he will serve half of that before he is released on licence.
The charge related to Facebook posts made by Boyce on 31 July during widespread disorder across the UK.
Riots followed the deaths of three girls who were allegedly stabbed at a Taylor Swift-themed dance class.
In August, the King visited the town after the deaths of Alice da Silva Aguiar, nine, Bebe King, six, and Elsie Dot Stancombe, seven.
Nearly 400 people have so far been jailed for offences relating to the disorder, the government has said.
Prosecuting barrister Alex Orndal told Merthyr Tydfil Crown Court that one post “showed an image of a mosque, with [Boyce’s] caption being, ‘No more mosques’.”
Within the comments section, he said mosques should be “burned down” with people inside.
He was arrested on 9 August and, while under caution, asked: “Is this because of the online stuff to do with the riots?”
The court heard the defendant was logged into the account from which the posts had been made at the time of his arrest.
In another post, he posted an image of a lion with the Union Jack and commented, “I’m ready for war”.
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In mitigation, defence barrister Nicholas Gedge said Boyce was “ashamed of what he did”.
“He held views at the time as a result of what he himself had seen online, unfortunately,” he added.
“He held, or was sympathetic to views, that were wrong, which he wholly recognises now.”
Mr Gedge added that the defendant “expresses through me, to this court, remorse for what he did, and I think remorse to society generally”.
“He really wants people to live peacefully together,” he added.
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Sentencing Boyce, Recorder of Cardiff Tracey Lloyd-Clarke said the posts showed his intention “was to incite serious violence”.
She noted that the offending took place “during a particularly sensitive social climate” and concluded that “appropriate punishment can only be achieved with immediate custody”.
UK
Kate meets families of Southport stabbing victims in first community visit since cancer diagnosis
The Princess of Wales has made a surprise visit to Southport with the Prince of Wales to meet the families of the three girls who died following the knife attack this summer.
It is a rare public appearance by the princess – her first community visit since the end of last year, her first since her cancer diagnosis and the end of her chemotherapy.
On Wednesday, it was confirmed to the media that Prince William would be making the trip to Southport, but just ahead of his arrival on Thursday it was announced that Kate had also decided to join her husband.
In private they met the families of six-year-old Bebe King, seven-year-old Elsie Dot Stancombe and nine-year-old Alice da Silva Aguiar, who died as a result of the attack at The Hart Space community centre in July.
A Taylor Swift yoga and dance workshop aimed at primary school children in Year 2 to Year 6 was taking place at the time of the attack. Eight other children and two adults were also injured.
The royal couple also met one of the dance teachers who was leading the session.
Victims Elsie Dot Stancombe, Alice Dasilva Aguiar and Bebe King.
Pic: Merseyside Police
It is understood William and Kate wanted to visit now to show their ongoing support for the families, the community and the first responders who attended the scene and the subsequent riots.
They met up with those members of the 999 services to hear their recollections of the day and spoke to police, ambulance and fire chiefs about the ongoing mental health support for staff.
Following the attack, the prince and princess issued a statement saying: “As parents, we cannot begin to imagine what the families, friends and loved ones of those killed and injured in Southport today are going through.
“We send our love, thoughts and prayers to all those involved in this horrid and heinous attack.”
Through their Royal Foundation they also made a donation to the National Police Wellbeing Service’s fundraiser to help fast track psychological and physical rehab for police and ambulance personnel.
In August, the King met with some of the children who survived the attack and thanked members of the community for their bravery and spirit.
Axel Rudakubana, who was 17 years old at the time and has now turned 18, has been charged with murder and attempted murder.
The visit comes after the princess announced in March that she had been diagnosed with cancer.
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Watch Kate’s family video in full
In a video in September, she confirmed she had finished her preventative chemotherapy, and while she would begin doing more work, she would only be carrying out light public duties as she continues her recovery.
Last week, she was photographed hugging teenage cancer patient Liz Hatton, and this year she has attended more formal and family events such as Wimbledon and Trooping the Colour.
But this trip to Southport is her first community visit meeting members of the public with her husband since the end of 2023.
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