Global inflation expected to linger and put brakes on rate cuts - OECD
Published: 09:48 04 Dec 2024 EST
Global interest rates, including in the UK, are likely to fall more slowly than expected, the OECD said on Wednesday.
The Paris-based economic body warned central banks against cutting interest rates too fast due to the threat from persistent services sector price inflation.
In its December economic outlook, the OECD predicted that the UK's recent Budget will boost the economy next year, but that new tax and spending measures are likely to lead to the Bank of England being slower in cutting interest rates.
It still forecasts that the base rate will fall over the coming year to 3.5% by early 2026 from 4.75% now.
The OECD changed its economic growth forecast for the UK, cutting its 2024 GDP growth expectations to 0.9% from the 1.1% it had given in its September outlook, but upped its prediction for 2025 to 1.7% from 1.2%.
For the US, growth forecasts were hiked to 2.4% for next year, up from 1.6%, driven by solid household consumption and "brisk" wage growth.
