MNI BRIEF: OBR Cuts UK GDP And Productivity Growth Forecast

The Office for Budget Responsibility's projection for UK growth has been lowered for every year of the forecast, according to an OBR document, after its cut its productivity growth forecast to 1% or lower for all of the forecast period.

Growth for 2026 was revised downwards to 1.4% from 1.9%, and revised to 1.5% for every other year of the forecast. Trend productivity growth is projected at 0.7% in 2026, 0.8% in 2027 and 2028, 0.9% in 2029, and 1.0% in 2030. (See MNI INTERVIEW: OBR To Cut Trend GDP, Make UK Fiscal Job Harder)

The OBR forecasts CPI inflation of 3.5% in 2025, 2.5% in 2026, and 2.0% in 2027, Reeves said. The Bank of England's central scenario would see CPI inflation fall to 2.5% in 2026 Q4 and back to its 2.0% target in 2027 Q4, according to its November Monetary Policy Report.