According to forecasts by the Organization for Economic Co-operation and Development (OECD), Britain remains on track to have the highest inflation among major economies in 2023, indicating that the country's inflation problem is more widespread than most of its peers.
Britain's headline inflation rate is expected to average 7.2% throughout 2023, up from a previous forecast of 6.9% made by the OECD in June.
The new estimate is the biggest increase for any G7 economy except Japan based on the latest estimates by the Paris-based think tank published on Tuesday.
This inflation rate is also higher than this year's inflation expectations for Germany which is 6.1% and France which is 5.8%, both of which are a reduction from the June forecast by the OECD.
Prime Minister Rishi Sunak has promised to halve inflation by the end of this year ahead of elections expected to take place in 2024. This means inflation will have to come down from 7% now to 5% in December compared to the same month last year.
"The OECD today has given a challenging global picture. The good news is that they still expect UK inflation to fall below 3% next year," Finance Minister Jeremy Hunt said in a statement.
Britain's high inflation rate has prompted the Bank of England to increase borrowing costs 14 times in a row since December 2021. The BoE is expected to raise Bank Rate again to 5.5% from 5.25% on Thursday despite the economy and investors believing that could be a hike the latest in the BoE's attempt to ease inflationary risks in the economy.
The OECD said it expected Britain's economy to grow by 0.3% in 2023, unchanged from its June forecast and the second weakest performance among rich economies after Germany, before growing by 0.8% in 2024.
