What's going on?

Not one, but two major intergovernmental economic organizations slashed their forecasts for global economic growth this week.

What does this mean?

The OECD and the World Bank weren�t exactly in good spirits when they gave their 2022 forecasts in December and January, and it goes without saying that a lot�s happened since then. Just a recap in case you�ve been off the grid: the Ukraine war has driven up the price of energy and food across the world, while China�s zero-Covid policy has disrupted international trade. So things were only going to go one way: the OECD has now downgraded its global economic forecast from 4.5% to 3%, and the World Bank from 4.1% to 2.9%. Both of them put it down to skyrocketing prices, with the OECD even near-doubling its inflation forecast for its member countries in 2022.

Why should I care?

The bigger picture: Brits are in the�
As for next year, the OECD is expecting the global economy will grow just 2.8%. But its outlook for one country is particularly dire: the organization doesn�t think the UK economy will grow at all. That�s because its inflation rate is higher than most other advanced economies, meaning it�ll need to raise interest rates faster to keep prices under control. That and rising taxes will put a dampener on spending, which could cripple the UK�s growth. In fact, only Russia � hobbled by sanctions � is set to perform worse among the G20.

Zooming out: It could be worse.
The OECD did say that it was more hopeful that we wouldn�t see stagflation � the combination of high inflation, low growth � on the scale that we did in the 1970s, when an oil price surge led to runaway prices and severe unemployment. It pointed out that developed economies are driven more by services than by energy these days, while central banks � now mostly independent from governments � are freer to make tough decisions to tackle inflation.