Hammond gets budget boost as OECD upgrades UK growth forecast

UK expected to grow faster than thought in 2017 but chancellor urged to support jobs amid fears over inflation and house prices

The west's leading economic thinktank has raised its outlook for the UK this year, in a boost to Philip Hammond ahead of his budget. But the Organisation for Economic Cooperation and Development said it still expected Britain's economy to shift down a gear compared with last year as rising inflation hits households.

The Paris-based organisation predicts that after expanding 1.8% in 2016, the UK economy will grow 1.6% this year. That is faster than the 1.2% it was predicting in late November. It made no changes to its earlier forecast for growth to slow further in 2018 to just 1% - which would be the weakest performance since the depths of the global financial crisis in 2009. It also highlighted rapid house price growth in the UK and other countries as a potential warning sign of another economic downturn.