| OECD forecasts slower global growth ahead due to tariffs, trade barriers and policy uncertainty | The UK economy faces a weaker outlook with highest G7 inflation in 2025, easing slightly in 2026 | Labour signals fiscal prudence, hints at tax rises, while pledging support for youth employment initiatives |
‘Finding the right balance in uncertain times’
The Organisation for Economic Co-operation and Development’s (OECD’s) latest Economic Outlook, released last week, projects global growth of 3.2% this year, easing to 2.9% by 2026, following growth of 3.3% in 2024. The slowdown reflects the drag from rising tariffs and persistent policy uncertainty, which are weighing on trade and investment.
The report, ‘Finding the right balance in uncertain times,’ notes that the global economy showed resilience in the first half of the year, but warns that the full effects of tariff increases are still being felt. As stockpiled goods are drawn down and new measures take hold, the impact on growth is expected to become clearer in the months ahead.
Geopolitical tensions, shifting policy priorities and higher trade barriers all represent meaningful risks. Looking ahead, OECD Secretary-General Mathias Cormann suggests, “To strengthen economic growth prospects, a key priority is to ensure a lasting resolution to trade tensions. We recommend that governments engage productively with one another to make international trading arrangements fairer and function better, in a way that preserves the economic benefits of open markets and rules-based global trade.”
Looking at the UK, the OECD predicts growth of 1.4% this year and 1.0% in 2026. This weaker outlook is attributed to a ‘tighter fiscal stance’ plus increased trade costs and ongoing uncertainty. The OECD anticipates that headline inflation in the G20 economies will be 3.4% in 2025, whilst the UK’s forecast sits slightly higher at 3.5%, the highest among the G7 nations. UK inflation is predicted to fall to 2.7% next year, although still the second-highest in the G7.
Global leaders come together at UN General Assembly
The 80th session of the United Nations General Assembly (UNGA) kicked off last week at the UN Headquarters in New York. Running from 22-30 September, the key theme this year was, ‘Better together: 80 years and more for peace, development and human rights.’ Representatives from all 193 member states gathered to discuss global issues during the General Debate.
Reeves promises prudence amid tough choices
At Labour’s annual conference in Liverpool, Chancellor Rachel Reeves acknowledged the government faces “difficult choices,” stressing she “will not take risks with the public finances.” She promised to keep “taxes, inflation and interest rates as low as possible,” but hinted at possible tax rises in November’s Budget, citing “international events” and the “long-term damage” to the economy.
On Tuesday, Keir Starmer pledged reforms to the NHS and education. He also replaced Tony Blair’s 50% university target with a new ambition for two-thirds of young people to pursue either higher education or high-quality apprenticeships and underlined Labour’s focus on economic growth, presenting it as essential both to raising living standards and to uniting the country.
UK open to overseas talent
Earlier this month, Trump announced that skilled workers applying for the H-1B visa programme will now have to pay a $100,000 fee. Until now, applicants have only paid about $1,500 in admin costs, so this is a drastic increase. Many visa holders rushed to return to the US before the 21 September deadline, but the White House later clarified that the fee is not applicable to those who already have the H-1B visa.
According to the BBC, the UK plans to double the number of visas available to skilled foreign workers to about 18,000 a year. Chancellor Rachel Reeves commented last week, “While President Trump announced late last week that it will make it harder to bring talent to the US, we want to make it easier to bring talent to the UK.”
Content creators’ contribution to the UK economy
A new report from Oxford Economics highlights that content creation is becoming a key part of the UK economy and job landscape. The research found that YouTube contributed £2.2bn to the UK economy in 2024 and supported over 45,000 full-time equivalent jobs. Despite this, YouTube’s inaugural Creator Consultation found that 56% of creators don’t feel like they have a voice in shaping government policies that impact their work and has called for creators to be recognised as a profession. As a result, an all-party parliamentary group (APPG) has been launched to represent UK creators and influencers, co-chaired by two former digital ministers, Feryal Clark MP and Lord Ed Vaizey.
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