More dire economic predictions prove Rachel Reeves is “out of her depth” – and the Chancellor is taking the UK down with her, Conservatives have warned. Shadow Business Secretary Andrew Griffith hit out after global trade body the Organisation of Economic Co-operation and Development (OECD) said the UK was on course to have the highest inflation rate of the world’s wealthiest countries. Finance experts S&P Global also said private sector growth was slowing.

He warned: “This is a damning indictment of Labour’s mismanagement. Economists say ‘alarm bells should be ringing’ – but the Government have their fingers in their ears. Labour’s tax hikes on businesses and over-regulation of employers are trampling underfoot any green shoots of growth. Businesses clearly think the Chancellor is out of her depth – and she’s taking the country down with her.”

The OECD said in a report that high taxes and spending cuts are set to throttle the UK economy while inflation remains stubbornly high.

It expects UK inflation to be 3.5% across 2025, 0.4 percentage points above its previous forecast, and higher than in any other G7 country.

Inflation will fall next year to 2.7%, but this will leave the UK with the second-highest rate in the G7 behind the US. The Government’s target rate is 2%.

The OECD highlighted the impact of rising food prices, echoing warnings from the British Retail Consortium, which said rising employment costs and poor harvests are pushing up checkout bills.

At the same time, the OECD warned that Britain’s economy will barely grow next year, partly due to Donald Trump’s tariffs on exports to the US, but also as a result of Government spending cuts or tax hikes.

It said: “In the United Kingdom, a tighter fiscal stance, higher trade costs and uncertainty are also anticipated to drag on external and domestic demand, with growth projected to ease from 1.4% in 2025 to 1.0% in 2026.”

The prediction comes ahead of the Government’s autumn Budget statement in November, when the Chancellor is expected to further raise taxes to help balance the books.

But the OECD also said the entire global economy is suffering as a result of US tariffs. The full effects “have yet to be felt” but are set to “dampen investment and trade” worldwide, it warned.

Ms Reeves said the figures “confirm that the British economy is stronger than forecast – it has been the fastest growing of any G7 economy in the first half of the year”.

She added: “But I know there is more to do to build an economy that works for working people – and rewards working people. That is what I’m determined we deliver through our plan for change.”

But Shadow Chancellor Sir Mel Stride said: “The OECD confirms what hard-working families already feel – under Labour, Britain is in a high-tax, high-inflation, low-growth doom loop.

“Rachel Reeves seems to think the solution is yet more tax rises. The UK is now teetering on the edge of stagflation, all driven by Labour’s economic mismanagement.

“This should be a wake-up call to the Chancellor: you can’t tax your way to growth.”

Tom Clougherty, executive director of the Institute of Economic Affairs, said: “The OECD’s forecast growth for the UK will barely sustain our ageing population, never mind delivering an upgrade in living standards.”

A separate report by S&P Global warned that growth in the UK’s private sector had slowed to its weakest level since May as higher business costs led to “subdued” demand and further job cuts.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “Alarm bells should be ringing that the economy is faltering.”