UK forecast to see highest inflation among G7 countries this year
23rd September 2025
The UK is expected to have the highest inflation among G7 countries this year, with rising food prices identified as a key factor.
According to the Organization for Economic Co-operation and Development (OECD), UK inflation is projected at 3.5% in 2025, exceeding the 2% average across Europe.
The UK economy grew by 0.7% over the first three months of 2025 and by 0.3% over the second quarter of this year.
The UK’s growth forecast for this year has risen to 1.4%, but the economy is expected to slow to 1% next year.
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, according to BBC News.
Shadow chancellor of the exchequer, Sir Mel Stride, commented on the news by saying: “OECD confirms Labour has put Britain in a high tax, high inflation, low growth doom loop. Rachel Reeves thinks the solution is more tax rises.
“The UK is now on the edge of stagflation, all driven by Labour’s economic mismanagement.”
Chancellor Rachel Reeves, however, said that the figures “confirm that the British economy is stronger than forecast – it has been the fastest growing of any G7 economy in the first half of the year”.
“But I know there is more to do to build an economy that works for working people – and rewards working people. That is what I’m determined we deliver through our plan for change,” she added.
Direct legacy of Brexit
Liz Webster, a beef farmer and co-founder of Save British Farming, said that OECD’s forecast that UK’s growth is set to slow sharply in 2026 due to higher trade costs and uncertainty is a “direct legacy of Brexit”.
She added: “This is the Brexit inflation trap. Europe has brought inflation under control; Britain has not because of Brexit. Families are paying more for bread, milk, fruit and vegetables because our leaders chose a path of isolation and short-term politics.
“The OECD makes it clear: Britain is an outlier, paying the highest price in the developed world for food.”
🏚️ Brexit sold us a dream house.
— Liz Webster (@LizWebsterSBF) September 23, 2025
Instead, we got a terraced dump with damp, high bills, substandard food & bad wiring.
🇺🇸 Now we’re told to wait for a US trade deal which just delivers us to the slum.
Meanwhile the key back to our old detached house is right there: Rejoin the… https://t.co/rdjIKOfhRF
NFU Mutual has warned ahead of the Autumn Budget that chancellor Rachel Reeves may explore various tax-raising measures, including a possible tightening of gifting allowances.
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