Consumer price growth in Britain has been driven by soaring fuel costs, a report has said © Getty Images/Bet_Noire

Britain will face one of the highest inflation rates of any major developed economy this year, the Organization for Economic Cooperation and Development (OECD) revealed on Tuesday.

UK inflation, which only recently fell to single digits for the first time since last summer, will average 7.2% this year, the Paris-based organization said in its latest Economic Outlook report.

The rate of price growth in the UK was the fastest among the Group of Seven (G7) major industrialized nations and the third fastest across the Group of Twenty (G20). Economists attributed this to fuel price fluctuations.

The OECD downgraded the UK’s growth forecast for 2024 from 1% to only 0.8%, pointing to the “significant risks” the country is facing.

The UK’s economic outlook has dimmed since June, following fourteen consecutive interest rate hikes by the Bank of England that have squeezed the country’s output. Even with a moderate rebound next year, the OECD predicted that Britain will be lagging behind the vast majority of the G20 countries.

“Activity has already weakened in the euro area and the United Kingdom, reflecting the lagged effect on incomes from the large energy price shock in 2022 and the comparative importance of bank-based finance in many European economies,” the report said.

The OECD maintained its estimated 0.3% growth in British GDP this year, which, if realized, would be the second worst economic performance among the G7 after Germany, which has already entered a recession.

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