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Rachel Reeves issued inflation warning over high-tax policies

Chancellor Rachel Reeves admits economy 'isn't working well enough'

An OECD report warns that the UK's high-tax and spend policies are set to hinder economic growth and fuel inflation, presenting a challenge for Rachel Reeves ahead of her autumn Budget.
The international body predicts the UK will experience one of the highest inflation rates among G7 economies, partly due to the added impact of Donald Trump’s tariffs.
Economic growth in the UK is forecast to decline from 1.4 per cent this year to 1 per cent in 2026, with inflation remaining at 3.5 per cent, exceeding the Bank of England's target.
Rachel Reeves defended the government's economic performance, highlighting that the British economy was the fastest-growing in the G7 during the first half of the year.
The report also indicates a global economic slowdown, with worldwide GDP projected to decrease, largely attributed to higher US tariffs impacting international trade and investment.