Rishi Sunak has dismissed gloomy international predictions about the state of the British economy as he insisted it is growing faster than forecast.
The Prime Minister hit out at “pessimistic” numbers from the OECD after it said the UK is set for “sluggish” growth over the next two years.
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Chancellor Jeremy Hunt also pushed back against the Paris-based body, insisting Britain is now “winning the war” thanks to tumbling inflation.
The backlash came as the Organisation for Economic Co-operation and Development downgraded its UK growth projections for 2024 and 2025.
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It said the UK will witness the weakest growth across the G7 group of major economies next year.
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The OECD - made up of 38 nations - predicted Britain will grow 0.4% in 2024, just ahead of last-placed Germany in the G7 group of wealthy nations.
In 2025, it projects that the UK will grow by 1% – the weakest performance in the G7.
By comparison, the US economy is predicted to power ahead this year with 2.6% growth, followed by Canada at 1%, and Italy and France at 0.7%.
In 2025, the US and Canadian economies are expected to continue to enjoy strong growth rates of 1.8%, followed by France on 1.3%.
German economic growth is forecast to increase from 0.2% this year to 1.1% next year, which will see it leapfrog Britain.
The OECD outlook is more pessimistic than that issued by the International Monetary Fund (IMF) earlier this year, which forecast UK growth of 1.5%. The Office for Budget Responsibility predicts growth will be even higher at 1.9%.
It also suggested the Bank of England should hold off on cutting interest rates - which are currently 5.25% until later in the year.
Downing Street dismissed the report, pointing to other forecasts from the IMF and the Office for Budget Responsibility that show the UK economy will perform much better.
The Prime minister’s official spokesman said: “Growth figures were 0.3% in January and 0.1% in February.
“Let’s see how the quarterly figures come out next week. The economy has continued to perform better than forecast and the IMF and OBR both forecast growth to be higher than the OECD, this year and next.”
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He added: “The forecasts are more pessimistic than the likes of the IMF and the OBR.
“We will see from the quarterly figures next week how growth in the first part of the year has been.
“The OECD also points out that our national insurance cut and full expensing and indeed, supply-side initiatives such as childcare expansion will help boost growth and potential output and lower fiscal pressures in the longer run.”
Mr Hunt said: “This forecast is not particularly surprising given our priority for the last year has been to tackle inflation with higher interest rates.
“But, now we are winning that war, growth matters, which is why it is significant that last month the IMF (International Monetary Fund) predicted the UK will grow faster over the next six years than any European G7 country or Japan.
“To sustain that we need to stick to our plan – competitive taxes, a flexible labour market and far-reaching welfare reform.”
Former Business Secretary Jacob Rees-Mogg said he didn't expect the OECD’s forecasts to be accurate.
“The OECD is almost as bad at forecasting as the Bank of England so I doubt these figures will turn out to be true.
“Interestingly the OECD’s chief economist [Clare Lombardelli] is just about to move to the Bank as deputy governor which will no doubt entrench the gloom.”
Conservative MP John Redwood said: "The OECD often gets its forecasts wrong. The urgent need is for the Bank of England to stop selling bonds at huge losses and sending the bill to taxpayers.
"The ECB is wisely not doing this and the US Fed has just announced a major reduction in its sales. It doesn't get taxpayer bailouts.
"Stopping bond sales will ease budget pressures in UK and make a growth strategy affordable.Bank losses so far have cost ￡49 billion"
John O’Connell, chief executive of the TaxPayers' Alliance, said the downgrade should act as the spark for major tax cuts to trigger growth.
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“Runaway spending and a 70 year high tax burden are suppressing growth and crippling households,” he said.
“Rather than tinkering at the edges, the government must bring spending under control and deliver the meaningful tax cuts needed to stimulate growth and support hard-working Brits.”
Shadow chief secretary to the Treasury Darren Jones said: “Only Labour has a long-term plan to grow the economy and make working people better off.”
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