UK economy will slow as Brexit reality bites, says OECD
The UK economy will slow in the coming years as Brexit uncertainty hampers growth and consumers endure a spending squeeze caused by higher prices and lower wages, says the Organisation for Economic Co-operation and Development (OECD).
OECD stood by its forecasts for UK gross domestic product (GDP), predicting it to slow from 1.8% to 1.6% for 2017, before dropping to 1% in 2018. It also said weaker growth could drive unemployment above 5%.
But while it expects household consumption to ease, it said consumers would also use money normally earmarked for savings to keep spending in the face of higher inflation.
It said: "Private consumption growth is projected to slow, as higher inflation holds back real earnings, but a weaker growth outlook should mitigate the extent of price pressures in the economy."