Global economic growth has been downgraded by the Organisation for Economic Co-operation and Development (OECD) as the impact of US President Donald Trump’s tariffs becomes more evident.

Major economies including the UK are expected to have lower rates of GDP, a measure of an economy’s value and total output, due to the US imposing taxes on some imported goods. The Paris-based OECD club of 38 prosperous countries voiced this prediction.

The UK economy is only expected to grow by 1.4% this year, down from the previously anticipated 1.7%.

Next year, growth is predicted to be 1.2%, lower than the 1.3% forecast before Mr Trump took office in January, according to the OECD’s interim economic outlook.

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This is unwelcome news for Chancellor Rachel Reeves following an unexpected contraction in January GDP unexpected contraction. The government has consistently stated that growing the economy is their top priority.

Responding to the OECD statistics, Ms Reeves noted that the UK is projected to be “Europe’s fastest-growing G7 economy over the coming years – second only to the US”.

“This report shows the world is changing, and increased global challenges such as trade uncertainty are impacting everyone.”

Global GDP is expected to slow down, the OECD indicated, from 3.2% in 2024 to 3.1% in 2025 and 3% in 2026 due to increased trade barriers and policy uncertainty surrounding the tariffs.

US growth has been revised downwards to 2.2% in 2025 and 1.6% in 2026. Higher GDP of 2.4% and 3.1% had been expected for this year and the next.

While the Eurozone has not escaped the downgrades, it is less affected than initially thought, according to the report.

“European economies will experience fewer direct economic effects from the tariff measures incorporated in the baseline projections, but heightened geopolitical and policy uncertainty is still likely to restrain growth,” the report stated.

Tariffs on 25% tariff on all steel and aluminium imports to the US came into effect, impacting UK products worth hundreds of millions of pounds.