London Daily

Focus on the big picture.
Tuesday, Oct 14, 2025

Zero-growth warning for UK economy as petrol prices surge

Zero-growth warning for UK economy as petrol prices surge

OECD singles out cost of living crisis as a cause of Britain’s slide down growth league table
Boris Johnson’s attempt to reset his troubled premiership has received a double blow after petrol prices had their biggest daily rise in 17 years and a leading international thinktank said the UK economy would slow to a standstill next year.

Fears that Britain is heading for a prolonged period of 1970s-style stagflation intensified amid fresh evidence of the damaging impact of the war in Ukraine on the cost of living and growth.

Dashing government hopes of a sustained recovery from the Covid pandemic, the Organisation for Economic Co-operation and Development (OECD) singled out the cost of living crisis as a cause of Britain’s slide down the international growth league table. It said the UK would be the weakest economy in the G7 group of leading industrial nations next year.

In the latest twist to inflation, motorists are faced with the imminent threat of the cost of filling the average family saloon hitting £100 for the first time, after the cost of a litre of petrol rose 2.23p on Tuesday to more than 180p.

The data firm Experian Catalist said a similar increase on Wednesday would result in the £100 barrier being breached. Some forecourts are already selling petrol above £2 a litre, including a BP garage on the A1 near Sunderland that was charging 202.9p.

Average diesel prices are also at a record high, hitting 186.6p on Tuesday, up 1.4p from Monday. Higher diesel prices have a significant impact on the wider economy because businesses typically use the fuel to fill vans and lorries. Before Russia’s invasion in late February, petrol and diesel were hovering around the 150p mark.

With ministers wary of a backlash from drivers, Downing Street told petrol retailers they could face investigation by the competition watchdog if there was evidence that the 5p-a-litre cut in fuel duty announced by Rishi Sunak in his March mini-budget was not being passed on.

Inflation has already hit a 40-year-high of 9% and the OECD said it would continue rising to peak at above 10% later in the year.

Despite the demands of some Conservative MPs, Sunak has no immediate plans for tax cuts and intends to wait until the budget in the autumn before coming up with another package of support. The chancellor and the prime minister will outline plans in the coming weeks to boost growth through measures such as improving skills and raising Britain’s investment in research and development.

The UK economy will grow by 3.6% in 2022 and there will be zero growth in 2023, according to the Paris-based OECD, with inflation expected to average 8.8% this year and fall to 7.4% in 2023.

The predictions, contained in the OECD’s half-yearly economic outlook, represent a sharp downgrade from the estimated 4.7% growth this year and 2.1% next year made six months ago.

Laurence Boone, the thinktank’s chief economist, said the UK was being hit by a combination of factors including higher interest rates, higher taxes, reduced trade and more expensive energy.

The OECD said the UK was expected to go from being the second fastest-growing economy in the G7 group of industrial nations after Canada this year to the slowest-growing in 2023. Japan, Germany, Italy, France and the US are the other members of the group.

A UK Treasury spokesperson said: “Thanks to the support we provided during the pandemic, the UK had the fastest growth in the G7 last year, and our unemployment rate is the lowest it’s been in nearly 50 years. But we recognise many people will be concerned by these forecasts.

“While we can’t insulate the UK from global pressures entirely, our economy is in a strong position to deal with these challenges. We have a plan for growth, and we are supporting people with the cost of living.”

The increase in petrol and diesel prices has been blamed on increased demand for fuel around the world, including in China and the US as Covid restrictions loosen. A squeeze on capacity at refineries has also kept pump prices high, while oil has fallen from peaks seen at the start of the war in Ukraine.

The business secretary, Kwasi Kwarteng, wrote to forecourt retailers last month to “remind them of their responsibilities” to pass on tax cuts to motorists. He said it was “unacceptable that different locations even within the same retail chain have widely different prices”.

He has asked the Competition and Markets Authority to examine the issue. The prime minister’s spokesperson said: “The CMA have said that if they find evidence that the cut is not being passed on, that would mean competition is not working and they could launch a formal investigation. Obviously we would wholeheartedly support them. We are continuing to look at all possible options. Transparency may have an important role to play.”
Newsletter

Related Articles

0:00
0:00
Close
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Australian Prime Minister’s Private Number Exposed Through AI Contact Scraper
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
China’s lesson for the US: it takes more than chips to win the AI race
Australia Faces Demographic Risk as Fertility Falls to Record Low
California County Reinstates Mask Mandate in Health Facilities as Respiratory Illness Risk Rises
Israel and Hamas Agree to First Phase of Trump-Brokered Gaza Truce, Hostages to Be Freed
French Political Turmoil Elevates Marine Le Pen as Rassemblement National Poised for Power
China Unveils Sweeping Rare Earth Export Controls to Shield ‘National Security’
The Davos Set in Decline: Why the World Economic Forum’s Power Must Be Challenged
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
×