The Organisation for Economic Co-operation and Development’s says growth in the UK has fallen for the sixth month in a row.
Growth in the UK, measured by an index based on composite leading indicators, fell from 101.8 in February to 101 in June. The OECD said the numbers point to the fact that the growth cycle is in “slowdown”.
However the indicators show that growth in France, Germany, Italy and Canada had fallen at a faster pace than the UK. If the UK’s performance continues to dip it will fall below the “trend rate” of growth which the OECD scores at 100 on its index.
The graph below shows the long-term performance of the OECD’s indicator with the straight line at 100 points signifying the “trend rate” of growth. The blue triangles indicate confirmed turning points in growth rates while the black triangles show turning points which could be reversed in future.
The report says growth in the 32 nation OECD area as a whole and G7 nations had reached a “possible peak” after the index fell from 102.9 in February to 102.2 in June in OECD nations and from 103.2 to 102.7 among the G7.
The report will be a blow the Government who have seen growth forecasts revised downward by think tanks, the Office for Budget Responsibility, the Confederation of British Industry and the International Monetary Fund in recent months. On Wednesday the Bank of England is expected to downgrade its forecast.
The Government is facing calls from Labour and think tanks to implement plans to stimulate growth. Yesterday Treasury economics secretary Justine Greening said the Government would bring forward plans to boost economic output in the Autumn.