Trump's trade wars hitting global growth, says OECD

Donald Trump's trade wars are splintering the global economy and unpicking progress made to reboot growth and tackle inflation, the Organisation for Economic Co-operation and Development (OECD) has said.

- Richard Partington

In its latest update, the Paris-based institution downgraded the prospects for global growth this year and next, including a sharp hit to activity in the US, Canada and Mexico.

The OECD cut its forecast for UK growth by 0.3 percentage points this year to 1.4%, and by 0.1 percentage points for 2026 to 1.2%, underscoring the challenge for the chancellor, Rachel Reeves, before next week's spring statement.

The body representing the world's richest economies said recent higher levels of economic growth and progress to bring down inflation was being undermined by the fallout from higher trade barriers and mounting geopolitical uncertainty.

Cutting its global growth forecast for this year from 3.3% to 3.1%, it said: "Significant risks remain." The global economy grew by 3.2% in 2024.