The Bank of England chief economist is more “comfortable” about the direction of inflation — but this came as the Organisation for Economic Co-operation and Development raised its forecast for the cost of living in the UK. The Paris-based thinktank’s interim economic outlook raised its forecast for UK inflation this year to 3.5% from a previous forecast of 3.1% and pushed up its projection for 2026 to 2.7%. Britain’s inflation rate of 3.8% in August was the highest in the G7, with the BoE predicting it will peak at 4% in September, double the central bank’s 2% target. But next year the thinktank forecasts the UK economy will ease to 1%, weighed down by “a tighter fiscal stance and higher trade costs,” behind the US, Canada and Germany. Chancellor Rachel Reeves said: “These 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.