UK forecast to have highest inflation in G7 this year by OECD

The UK is forecast to see the highest rate of inflation of the G7 advanced economies this year, according to an influential global policy group.

The Organization for Economic Co-operation and Development (OECD) raised its prediction for UK inflation - the rate at which prices rise - to 3.5% across 2025, citing higher food costs as a factor.

It increased its forecast slightly for UK growth this year to 1.4%, but the economy is still expected to slow next year.

The report comes as Chancellor Rachel Reeves is preparing November's Budget in which she is expected to put up taxes or cut spending in order to stick to her own rules on government borrowing.

The OECD's UK inflation forecast for 2025 is higher than its previous estimate of 3.1%, and while the rate is expected to fall to 2.7% in 2026, that would still be the second highest in the G7.