2006 OECD Economic Outlook, Volume 2006 Issue 1

image of OECD Economic Outlook, Volume 2006 Issue 1
OECD's twice-yearly assessment of the major economic trends and policies in member countries and selected non-members. This issue covers the outlook to the end of 2007.  Together with a wide range of cross-country statistics, the Outlook provides a unique tool to keep abreast of world economic developments. This issue also contains a special chapter on Future Budget Pressures Arising from Spending on Health and Long-Term Care.

English Also available in: German, French

United Kingdom

Following the slowdown in activity in the first half of 2005, signs of a pick-up in momentum are emerging, and a strengthening in private consumption and investment is expected to take GDP growth to around 2½ per cent in 2006 and 3% in 2007. Headline inflation is projected to move slightly higher in the short term, in response to the recent spike in domestic gas prices; beyond that it should fall back below the 2% target, converging towards the rate of core inflation. Given the recent pick-up in inflation expectations, and the risk of spill-over of higher energy prices into core inflation, the OECD projections assume that policy interest rates remain unchanged. The general government deficit has now exceeded 3% of GDP for three years in a row, and is expected to narrow only very gradually over the forecast horizon; measures to achieve a more decisive reduction in the deficit may thus be required. Reforming the disability benefit scheme and improving workforce skills should remain priorities in order to raise potential growth.

English Also available in: French, German

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