What we now know about the UK economy in four charts
Summary
The Office for Budget Responsibility says higher energy prices linked to the US-Iran conflict will slow UK growth, keep inflation elevated and reduce household living standards in the near term. It also expects interest rates and government debt costs to rise, while forecasting a later recovery in growth and household income.Key Facts
- The OBR raised its forecast for UK growth this year but cut its forecast for next year from 1.6% to 1%.
- The OBR expects inflation to peak at 3.8% in 2027 and average 3.4% next year.
- Petrol costs almost £1.73 per litre on average, while diesel costs nearly £1.99, according to the article.
- The OBR forecasts a dip in real household disposable income next year, with lower-income households expected to be hit harder.
- The OBR says interest rates could rise from 3.75% to as high as 4.5% in the coming years.
- Higher borrowing costs are expected to increase government debt-interest spending and borrowing.
- The OBR expects inflation to fall toward the Bank of England's 2% target by the end of the decade.
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