Can the UK economy outperform Russia?

First the good news. Unlike the IMF, which predicted in January that the UK economy would have a worse 2023 than even Russia, the OECD’s latest forecast has Britain outperforming Russia. Now the bad news: the OECD still predicts the UK to perform worse than any European country other than Russia. 

Its latest bulletin, published this morning, sees Britain shrinking by 0.2 per cent in 2023, compared with growth of 0.3 per cent for Germany, 0.7 per cent for France and 0.8 per cent for the Euro area as a whole. The Russian economy, by the way, is expected to shrink by 2.5 per cent. 

Why the negative outlook for the UK? The latest OECD report offers no specific analysis of the UK, although last autumn, when the organisation was predicting a slightly sharper contraction of 0.4 per cent in the UK economy over 2023, it spoke of falling consumer demand due to rising living costs, along with labour and good supply shortages.