OECD puts UK 2015 economic growth at second fastest in G7

OECD’s latest growth forecasts puts UK economy in second place out of G7 nations.

According to forecasts from the Organisation for Economic Cooperation and Development (OECD) the UK’s economy is set to record the second fastest growth rate in 2015 out of the G7 countries. Economic growth in the US is predicted to take the top spot, with Britain coming next, despite a slight downgrade to expectations.

This latest set of data adds to a mass of forecasts that illustrate that the British economy is expected to return to health this year.

The OECD is now predicting growth of 2.6 per cent during 2015, while the BCC recently upgraded its projections to 2.7 per cent this year.

“Lower oil prices and widespread monetary easing have brought the world economy to a turning point, with the potential for the acceleration of growth that has been needed in many countries,” said OECD chief economist Catherine Mann.

However, during the UK’s budget announcement this year, Chancellor George Osborne said the Office for Budget Responsibility (OBR) forecasts that the UK economy will only grow by 2.5 per cent in 2015.

The OECD’s and the BCC’s projections are stronger than that of the OBR, which many analysts have shrugged off as too conservative. Despite this, Britain is still ahead of most developed countries due to the recent collapse in oil prices and loose monetary policy.

The international economic group have noted that some risks to economic expansion remain.

“While central bank policies remain the centrepiece of the recovery, the exclusive reliance on monetary policy to manage demand should be avoided to mitigate these risks,” the OECD said.

“A more balanced approach to policy is required with fiscal and, especially, structural policies providing synergistic support to monetary policy," it added.

In plain language, the OECD is saying that economic growth should be supported with a number of fiscal and structural policies, instead of rock-bottom interest rates alone.