UK to be major economy worst hit by Ukraine war, says OECD

theguardian.com:

Britain’s economy is forecast to slow to a standstill next year as it suffers more than any other major industrial country from the effects of Russia’s invasion of Ukraine.

The UK will grow by 3.6% in 2022 before posting zero growth in 2023, according to the Paris-based thinktank the Organisation for Economic Co-Operation and Development (OECD), with inflation expected to average 8.8% this year and fall only slightly to 7.4% in 2023.

The predictions – contained in the OECD’s half-yearly economic outlook – represent a sharp downgrade from the estimated 4.7% growth this year and 2.1% next year made six months ago.

Laurence Boone, the thinktank’s chief economist, said the UK was being hit by a combination of factors, including higher interest rates, higher taxes, reduced trade and more expensive energy.

The OECD said the UK was expected to go from the second-fastest-growing economy in the G7 group of industrial nations after Canada this year to the slowest-growing in 2023. Japan, Germany, Italy, France and the US make up the other members of the group.

Boone said the world economy was paying a “hefty price” for Russia’s invasion. “A humanitarian crisis is unfolding before our eyes, leaving thousands dead, forcing millions of refugees to flee their homes and threatening an economic recovery that was under way after two years of the pandemic,” she said.

“As Russia and Ukraine are large commodity exporters, the war has sent energy and food prices soaring, making life much harder for many people across the world.”

Boone said the OECD had cut its global growth forecast for 2022 from 4.5% to 3%, while inflation in the organisation’s 38 wealthy-country members would average almost 9% – double the forecast in last December’s Economic