The UK is expected to be the third-fastest growing economy in the G7 in 2026, despite having the highest inflation across the advanced nation group. That was the opinion of the Organisation for Economic Cooperation and Development (OECD) just days after Rachel Reeves’s 2025 Budget – a budget dominated by tax rises, welfare reforms and fiscal balancing.

But the OECD also warned that the economy would slow to 1.2% – a slightly revised uptick from their previous estimate of 1%.

Economic growth will slow 

The OECD’s forecast is slightly more pessimistic than the UK Treasury-funded Office of Budget Responsibility (OBR) which puts the economic growth forecast at 1.4% in 2026, compared with its previous 1.9% prediction. The OBR also warned that inflation and unemployment levels would be higher in 2026 than previously predicted.

Trade turbulence could persist

“2026 is likely to be quite a difficult year for the UK economy,” says Suren Thiru, ICAEW Director, Economies. “We’re likely to see economic growth slow next year due to a number of headwinds.” Consumers, he warns, will find challenges around high unemployment and higher taxes. Businesses too, will continue to operate in ‘uncertain’ climates.

“Some of the trade turbulence we saw in the first part of 2025 is likely to persist into 2026 and that’s clearly going to be a challenge.”

Global trade tariffs imposed by President Trump during his second term in office, for example, caused widespread disruption: damaging supply chains, increasing business costs and stalling trade activities. And while US trade tariff volatility persists, with import tariffs on many EU goods raised to 15% in some instances, there are some signs of stabilisation.

Inflation will fall quicker

And there’s more good news, according to Thiru, with UK inflation widely expected to ‘fall more quickly’ next year and gradually return to the Bank of England’s target of 2%.

Even so, the next 12 months could be fairly turbulent. So, what role can accountants play in helping their clients and businesses navigate this potentially difficult period?

Uncertainty may mean opportunities

According to Thiru, it’s about making sense of the economic climate and using data-driven insights to advise and support. Accountants are best placed to provide this support – not least due to their specialist sector knowledge and ability to interpret and analyse financial data.

“Uncertain economic environments can provide opportunities for accountants to be trusted business partners and advisors,” he says.

“Accountants offer real insight as to what’s going on and can advise businesses and consumers on navigating difficult periods.”