The REAL Truth about the GDP and Wage Growth of the UK in 2026

Added: 2026-06-03

[00:00:00]So, how about we start directly with the big picture from the official forecasters themselves, the Office for Budget Responsibility. Their latest economic outlook came out very recently in March 2026. And according to their official figures, the real GDP growth is expected to slow down to 1.1% in 2026.

[00:00:18]That's down almost 0.3 percentage points from what they thought back in November 2025. And the outlook for the future years shows that this GDP growth is expected to average around 1.6% from the years [music] 2027 to 2030. Along with that, unemployment is expected to peak at around 5% this year, while it was at around 4% previously. And what does this mean? That means even more young people and new entrants into the workforce will struggle to find work [music] because of hiring has slowed down really heavily.

[00:00:50]But luckily, the numbers do show that unemployment might drift back around to around 4% by the year 2030. A very important factor right now, which is the nominal wage growth, is slowing down to around 3 and 1/2% this year and is expected to be around 2% the year after.

[00:01:05]And along with that, real wages, which is the number that you actually feel in your pocket after inflation, these real wages have already dropped to below 1% and are expected to stay weak. By late 2026, inflation should be back down to the Bank of England's target of 2%, [music] but this will be after all these shockwaves have gone through. And what do all these facts, figures, and numbers show us? They paint a picture which is not too bright because what they tell us is that the growth in the UK is slower than almost every major economy in the world right now, while things like debt and taxes just keep climbing. The Office for Budget Responsibility even said that they're surprised that there's more spare capacity in the economy right now than what they thought would be a few months ago, which actually means that things are actually softer than what they expected it to be.