OECD scales back forecast of immediate Iran war impact on UK

LONDON, June 3 (Reuters) - The OECD on ​Wednesday scaled back ⁠an earlier assessment of ​the immediate impact of the Iran war on British growth and inflation this year, ​but ‌sees less recovery in 2027 than it did in its last set ⁠of forecasts in late March.

"Growth will weaken to ⁠0.9% in 2026, as ​renewed inflationary pressures squeeze real incomes and exacerbate uncertainty, weighing on private consumption and investment," the Paris-based body said about Britain in its economic outlook.

Following ​are ‌key points from and context about the report:

* The OECD's new 2026 growth forecast of 0.9% is an upgrade from the 0.7% forecast in March

* For 2027, the OECD sees British ​GDP growth of 1.1%, down from a previous forecast of 1.3%

* Consumer ‌price inflation is expected to average 3.7% in 2026 - compared to 4% forecast in March - and ‌2.4% in 2027

* The OECD's March forecasts for Britain were the biggest growth downgrade and sharpest inflation upgrade it made for any major ​advanced economy

* The OECD forecasts the Bank of England will keep interest rates unchanged ‌this year before being cut by a quarter-point to 3.5% in the first quarter of 2027

* Unemployment is forecast to rise to 5.5% ⁠this ⁠year and fall to 5.3% in 2027

* The ‌OECD sees downside risks from the government's limited ability to borrow to provide energy ​subsidies for ​poorer households

* Further risks to Britain include limited fertiliser ‌supply pushing up food prices, localised shortages of diesel in rural areas and jet fuel shortages limiting tourism and pharmaceutical exports, the OECD said (Reporting by David Milliken; editing by Suban Abdulla)