Brits are facing the highest inflation in the G7 as the country reels from the impact of Labour's tax raid. The OECD has given a stark warning about the backdrop for Rachel Reeves as she prepares for a crucial Budget. But it is then seen as dropping to 1 per cent in 2026 as higher tax and spending cuts squash activity, adding to a hit from US President Donald Trump's tariff hikes. The bleak figures suggest the UK is at risk of another bout of 'Stagflation', where prices surge but the economy stalls. The Chancellor said the OECD figures 'confirm that the British economy is stronger than forecast – it has been the fastest growing of any G7 economy in the first half of the year'.