The UK inflation rate is set to be the highest among the 67 nations, with the latest estimates from the OECD predicting the UK will continue to be behind many of its global giant peers when it comes to growth expectations.
The Organisation for Economic Co-operation and Development (OECD) has reported that the inflation rate in the UK will average 7.2% in 2023 – this figure will be the highest in the G7 group.
Including powerful countries such as the US, Canada, Japan, France, Italy and Germany, the OECD raised its estimation for UK inflation by 0.3 percent from its previous estimate, and it will be over 1.1% higher than France (6.1%), the second-highest figure.
What Does the Rising Rate of Inflation Mean for Businesses?
The UK’s latest inflation data may come as a concern for many small businesses – the economic theory behind hiking rates being that it makes it more expensive for people to borrow money, therefore spending less cash and buying fewer things which will in turn ease prices.
This theory means that it is expected that fewer clients and/or customers will have the cash flow available to purchase a business’ service or product, therefore, having a possibly negative effect on businesses across the nation.
The prime minister's official spokesman said that OECD's predictions on economic growth did not take into account recent revisions elsewhere suggesting Britain's economy had recovered quicker than others from the Covid pandemic, as reported by the BBC.
The forecast by the OECD aims to give a guide about what is most likely to happen in future, however, is not always accurate and can change.
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