The OECD (Organisation for Economic Co-operation and Development) has downgraded its forecast for the UK economy. While that might sound like something that only concerns politicians and big businesses, the truth is these shifts can ripple down and affect us all — especially small business owners.

The UK economy is now expected to grow by just 1.3% in 2025 (down from 1.4%) and 1% in 2026 (down from 1.2%). These aren’t huge drops on paper, but they point to a broader picture of slowing momentum. After a promising 0.7% growth in the first quarter of this year, confidence has started to dip. Retail sales are up and down, and consumers are feeling cautious.

Why does this matter?

When growth slows, people tend to spend less. That impacts sales, investment, and confidence — and it also tightens the government’s purse strings. The Chancellor now faces the difficult task of balancing rising costs (think pensions, the NHS, and defence) with sluggish tax revenue. That could mean fewer support schemes or even tax changes in future budgets.

The OECD’s advice? Prioritise capital investment, and go easy on day-to-day spending.That’s advice I’d echo on a smaller scale too. If you’re running a business, now’s a good time to:

✅ Review your current spending and identify any areas where you could trim or reinvest.
✅ Reassess your goals for the year and see if they still make sense in this economic climate.
✅ Start thinking ahead — what will tighter conditions mean for your customers, and how can you stay one step ahead?

If you’re not sure where to start, I can help. Whether you need a second pair of eyes on your forecasts or want to chat through your options for cutting costs or planning future investment, just get in touch.

Now more than ever, making confident, informed financial decisions matters.