Trump tariffs forecast to hurt global growth

The global economy is expected to grow more slowly this year, mainly due to the tariffs imposed by US President Donald Trump, according to the Organization for Economic Co-operation and Development (OECD), a leading international policy group. The OECD has lowered its forecast for worldwide economic growth to a modest 2. 9%, down from an earlier prediction of 3. 1%. This slowdown is largely attributed to a significant increase in trade barriers, which are taxes or restrictions placed on goods coming from other countries. These barriers make international trade more difficult and costly, affecting economies around the world. The OECD warned that almost every country will feel the impact of these weakened economic prospects, including the United Kingdom. The group also reduced its growth forecast for the UK, citing not only the effects of trade tensions but also the country's own financial challenges. It suggested that the UK should consider raising tax revenues to strengthen public finances. Since President Trump took office, many countries have been targeted by US tariffs, but his unpredictable approach to applying these measures has created widespread uncertainty in global markets. Alvaro Pereira, the OECD's chief economist, told the BBC that the organization expects a downgrade in economic growth and job creation for nearly every country. The OECD also cut its forecast for the US economy this year from 2. 2% growth to 1. 6%, and it predicts that growth will slow further by 2026. The group expressed concern about rising inflation in the US, which contradicts President Trump's repeated promises to reduce inflation during his campaign. Before the OECD report was released, Trump posted on social media that the US economy was booming because of tariffs. However, official data showed that the US economy shrank by 0. 2% in the first quarter of the year, marking the first contraction since 2022. Meanwhile, the OECD lowered its expectations for UK growth this year to 1. 3% from 1. 4% and forecasted 1% growth in 2026, down from 1. 2%. The group said that UK growth would be dampened by heightened trade tensions and elevated uncertainty. It also pointed out that the UK faces other issues, such as substantial government debt interest payments and a very thin financial buffer. In March, UK Chancellor Rachel Reeves announced £14 billion in measures, including £4. 8 billion in welfare cuts, to maintain fiscal discipline. Although the UK economy grew by 0. 7% between January and March, the OECD cautioned that momentum is weakening due to deteriorating business sentiment. The group recommended that the UK government raise tax revenues by closing loopholes and re-evaluating council tax bands based on updated property values. Currently, council tax in England is calculated based on property prices from April 1991, and in Wales from April 2003. Next week, Chancellor Reeves will present her Spending Review, facing difficult decisions on budget allocations. The OECD emphasized that strengthening public finances remains a priority and urged the government to deliver on its ambitious fiscal plans, including the upcoming Spending Review. The government has already committed billions of pounds to defense spending, and the National Health Service (NHS) is expected to be a focus, especially with Labour's pledge to reduce waiting lists.