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.”
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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 Sikh woman who was raped in a “racially aggravated attack” in the West Midlands says she “would never wish this on anyone”.
Police were called just before 8.30am on Tuesday after the woman, who is in her 20s, reported being attacked by two white men in the area around Tame Road in Oldbury.
The Sikh Federation (UK) said the perpetrators allegedly told the woman during the attack: “You don’t belong in this country, get out.”
The woman, who is entitled to anonymity as the victim of a sex offence, issued a statement through community group Sikh Youth UK.
Thanking everyone for their support, she said: “We are going through a lot, but the strength and kindness shown by the right people in the community has been incredible and I can’t thank them enough for being my voice.
“I would never wish this on anyone. All I was doing was going about my day on my way to work, and what has happened has deeply affected us.”
Calling her family her “rock,” she went on: “The police are doing their best to find those responsible, and I truly hope they are caught so that this doesn’t happen to anyone else.”
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She said she was “truly humbled” by the love and support she’d received.
She added: “I want to personally thank my family, Sikh Youth UK, who have been so supportive, the local Gurdwara committees and Sikh orgs, and everyone in my community who has stood by me. I cannot thank you enough for helping me get through this difficult time.”
An emergency meeting was later held at the Guru Nanak Gurdwara temple in Smethwick, a few miles from Oldbury, following concerns within the community.
Police are still trying to identify the perpetrators of the attack, which they say is being treated as “racially aggravated”.
Officers said CCTV, forensic and other enquiries are well underway, but have appealed for anyone in the area who may have seen the men, or have any further information, to contact the force.
One of the men is described as having a shaved head, of heavy build, and was reported to be wearing a dark coloured sweatshirt and gloves.
The second man was reportedly wearing a grey top with a silver zip.
A man has admitted arson after a major fire at an MP’s constituency office.
Joshua Oliver, 28, pleaded guilty to starting the fire which destroyed the office of Labour MP Sharon Hodgson, at Vermont House in Washington, Tyne and Wear.
The fire also wrecked a small charity for people with very rare genetic diseases and an NHS mental health service for veterans.
The guilty plea was entered at Newcastle Magistrates’ Court on the basis that it was reckless rather than intentional.
Image: Hodgson, who has been an MP since 2005, winning her seat again in 2019. Pic: Reuters
The Crown did not accept that basis of plea.
Oliver, of no fixed address, had been living in a tent nearby, the court heard.
Northumbria Police previously said it was “alerted to a fire at a premises on Woodland Terrace in the Washington area” shortly after 12.20am on Thursday.
“Emergency services attended and no one is reported to have been injured in the incident,” it added.
Drone footage from the scene showed extensive damage to the building.
A spokesperson for the Crown Prosecution Service said: “Our prosecutors have worked to establish that there is sufficient evidence to bring the case to trial and that it is in the public interest to pursue criminal proceedings.
“We have worked closely with Northumbria Police as they carried out their investigation.”
Oliver was remanded in custody and will appear at Newcastle Crown Court on Tuesday, 14 October.
Dozens of people have gathered at a Sikh temple to attend an emergency meeting after police in the West Midlands said they are investigating the rape of a woman as a “racially motivated attack”.
The victim, reported to be a British-born Sikh aged in her 20s, told officers a racist remark was made to her during the attack in Oldbury, which was reported to police just before 8.30am on Tuesday.
The Sikh Federation (UK) said the perpetrators allegedly told the woman during the attack: “You don’t belong in this country, get out.”
Jas Singh, principal advisor to the Sikh Federation (UK), was among the group of faith and community leaders responsible for holding the meeting at the Guru Nanak Gurdwara temple in Smethwick, a few miles from Oldbury, following concerns within the community.
“I think if you look at it in the context of the climate, it makes it even more worrying because there is a trend of hatred… the targeting of migrants,” he said.
“Ultimately, what that means is the targeting of people’s skin colour, and as Sikhs we have the most distinct, unique identity,” he added.
“We bear the brunt of all prejudice and ignorance, and hate.”
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Image: Principal advisor to the Sikh Federation (UK) Jas Singh
Similar sentiments were raised at the meeting, with many horrified by the reports of the sexual assault as well as concerns about their own safety.
“People are trying to divide us,” said a woman in her 30s, who did not want to be named but said, as a Sikh woman, she wanted to be present to have her voice heard.
She was not only referencing the sexual assault but also what she believes has been an increase in overt discrimination.
“Let’s call it what it is, this is racism,” she told the meeting, as she broke down in tears.
Reverend Nick Ross, from Smethwick’s Holy Trinity Church, was also in attendance at the emergency meeting.
He commented on “offensive” graffiti that had been left on the side of the wall of the Sikh temple, while saying his Anglican church had also been defaced.
“We cannot just ignore it, it will go on and it will build, and there will be incidents like this,” he said, referencing racial tensions across the country.
Image: Faith and community leaders organised the meeting at the Sikh temple
Police are still trying to identify the perpetrators of the attack and want to speak to anyone who may have seen two white men in the area.
The first is described as having a shaved head and a heavy build, and was wearing a dark sweatshirt with gloves on, and the second was reportedly wearing a grey top with a silver zip.
Chief Superintendent Kim Madill, of Sandwell Police, said: “We are working really hard to identify those responsible, with CCTV, forensic and other inquiries well under way.
“We fully understand the anger and worry that this has caused, and I am speaking to people in the community today to reassure them that we are doing everything we can to identify and arrest those responsible.
“Incidents like this are incredibly rare, but people can expect to see extra patrols in the area.”