OECD predicts 'subdued' economic growth for UK

The UK's economic growth will be 'subdued' in 2011, held back by fiscal tightening and weak real income growth, according to a new OECD report.

However, the recovery could gain momentum in 2012 when exports and business investment are expected to increase. While GDP is predicted to rise by 1.7% in 2011, a 2% increase is expected in 2012, while unemployment is forecast to fall from 7.8% to 7.6%. In its economic outlook, the OECD also praises the moves made by the coalition government in the recent Spending Review. It says: "The government's ambitious medium-term plan has significantly reduced fiscal risks and could, in combination with efficiency improvements in health spending and structural reforms, support growth in the ...