The Organisation for Economic Co-operation and Development (OECD) has warned that the British economy is being negatively affected by a resurgence in energy price inflation driven by the war with Iran, urging the UK government to accelerate its growth agenda and overcome regional disparities.
The British news agency PA Media reported that the OECD maintained its forecasts for UK economic growth in a new report.
The organisation projected GDP growth of 0.9% in 2026, compared with 1.4% last year. It noted that the renewed surge in energy prices caused by the war with Iran has weakened growth expectations this year due to its impact on households and businesses.
The OECD report indicated that the conflict has highlighted the British economy's vulnerability to fossil fuel price volatility, underscoring the need to decarbonise energy generation and accelerate the transition to electricity.
Furthermore, the report concluded that regional disparities within the country are adversely affecting living standards and economic performance, particularly amid rising unemployment and a shortage of job opportunities for young people.