UK only G7 member to see economy shrink this year, says OECD

The UK will be the only industrialised country other than Russia to see its economy shrink this year, according to projections from the Organization for Economic Cooperation and Development.

The OECD expects the UK economy to shrink by 0.2% this year. This is better than its previous forecast for a 0.4% contraction but still leaves the UK at the bottom of the G7 league table.

It projected a "mild rebound" in the UK next year, with growth of 0.9%, up from a previous forecast of 0.2%.

The US and Japan are expected to see a 1.5% and 1.4% expansion this year, respectively, while Germany will see growth of 0.3%, the OECD said. It expects the Russian economy to contract by 2.5%.

The OECD’s projections do not take into account any of the policies announced in Chancellor Jeremy Hunt’s Spring Budget on Wednesday.

Earlier this week, the Office for Budget Responsibility said the UK economy would shrink by 0.2% in 2023 but avoid a technical recession.