Rahel reeves A new shock is ahead of him Autumn budget Warned with an international report that its high tax and expenditure policies would prevent economic growth and cause increase in inflation.
A major international body that monitors economic activity, also concluded that additional impact of Donald TrumpThe tariffs will give the UK one of the highest rates of inflation in the major economies of G7.
Conclusion by Economic Cooperation and Development Organization (OECD) Come as Ms. Reeves, in your budget to increase taxes even more, your spending plans are considered to be around £ 40BN to close a black hole.
It is difficult for a Chancellor who came to the office with “No. 1 Mission” to bring about economic development last year, difficult to read in the report.
Instead, the OECD suggested that its plans were going to reverse with an increase in 2026 with a fall of 1.4 percent to 1 percent this year.
It also warned that inflation will be 3.5 percent well above the bank of England’s 2.7 percent target.
However, a disregard Ms. Reeves said: “These figures confirm that the British economy is stronger than the forecast – it has been the fastest growing of any G7 economy in the first half of the year.
“But I know that it works for more working people to build an economy – and reward working people. That is what I determine that we distribute through our plan for change.”
And with the labor set to start your conference next week, the pressure on the Chancellor is increasing to introduce taxes on pension, savings and property on the left side of party and trade unions.
Meanwhile, banks are proposed for a raid on profits, a gambling tax, and implement national insurance on rent collected by the landlords.
Overnight the Resolution Foundation, whose former director Torreston Bell is now a Treasury Minister, suggested cutting national insurance from 2P and adding 2P to income tax.
But the debate is fierce against a difficult economic background for the labor government.
The OECD stated that Britain’s “tight fiscal stance”, which means high tax and low government spending, is expected to be weight on the economy, with growth decreasing by 1 percent in 2026 with growth with growth this year.
Economists of the influential organization also predicted that Britain’s inflation would increase, with Britain this year would have the highest level of experience between the G7 group of advanced economies.
Inflation in the UK is expected to reach 3.5 percent in 2025, 0.4 percent higher than its previous forecasts, and is still above 2.7 percent of the Bank of England target in 2026, with an increase in food prices.
According to the report, it will see the UK suffering from the second highest rate of inflation in G7 next year.
While OECD forecasts its 2025 for UK GDP (GDP) from 1.3 percent of the predicted 1.3 percent, it kept the outlook unchanged for 2026, meaning that means a stable pulling in development in a year.
In its interim economic perspective, it is said that the UK would be kept back by “a tight fiscal trend, high trade costs and uncertainty”, which would be said that “pulling on external and domestic demand”.
This comes ahead of the government’s autumn budget statement in November, under pressure from the Chancellor, under pressure to pursue taxes to help balance the books.
The OECD also warned that the growth in the world’s economy would be quite weak in the rest of the year as higher American tariffs are effective, reducing global trade and investment.
The global economy was stronger than expected in the first half of 2025, but the activity “will be very soft in the second half of this year”, said.
This is partly to promote goods production and trade due to “front -loading” – referring to a crowd of imports in the first half.
This happened when businesses made more shipments as they tried to overtake the Stapper Levi on their exports, as a result of Mr. Trump’s policy changes.
This meant that the industrial production growth overtook the average of 2024 among the most advanced economies in the first half of 2025, the OECD found.
Strong levels of investment in technology sectors, especially artificial intelligence (AI), also increase activity in the US and Japan.
But as the front-loading grinds a stage, high tariffs are effective, and uncertainty reduce investment and trade, economic growth is expected to slow down.
The OECD said that trade between the US and China has declined rapidly among the two largest economies in the world.
Global GDP declines by 3.3 percent in 2024 to 3.2 percent in 2025 and 2.9 percent in 2026.
However, the 2025 figure is 0.3 percent higher than the previous forecast of OECD in June.
OECD said that spending for governments around the world and tax options should be focused on “need to strengthen permanent economic growth” by “preserving adequate support for needy people”.
It was also recommended that central banks should remain “cautious”, but continue to cut interest rates where inflation is downwards.