The Organisation for Economic Co-operation and Development (OECD) has upgraded its growth forecast for the UK, crediting the government’s £70 billion-a-year public spending package spearheaded by Chancellor Rachel Reeves. The OECD now expects the UK economy to grow by 0.9% in 2024 and 1.7% in 2025, significantly higher than its previous May forecasts of 0.4% and 1.0%.

However, the Paris-based organisation has cautioned that this growth is accompanied by rising public debt and persistent inflation. The UK’s upgrade contrasts with downgrades for France, Germany, and Italy, which are facing stagnation in the eurozone’s largest economies.

The OECD acknowledged that the UK’s growth is largely driven by an unprecedented increase in government expenditure, a strategy that has pushed the country’s debt to unsustainable levels. The debt-to-GDP ratio is projected to exceed 100% in the coming years. While the fiscal stimulus has provided a boost to growth, the OECD warned that it would keep inflation above the Bank of England’s 2% target for the next two years. This is primarily due to wage pressures and high public spending. Although interest rates are expected to fall to 3.5% by early 2026, monetary policy may remain tight for longer to address persistent price pressures.

Another concern raised by the OECD is the UK’s shrinking labour force, which has seen one of the largest post-pandemic contractions in workforce participation among OECD nations, second only to Costa Rica. The organisation called for reforms to the benefits system and increased childcare support to help encourage more people, particularly women, to return to work.

While Reeves welcomed the growth forecast upgrade, highlighting the UK as the fastest-growing European economy in the G7 over the next three years, the OECD emphasized the importance of balancing fiscal stimulus with sustainable debt management.

The Chancellor’s maiden Budget, funded by £40 billion in tax hikes and borrowing, also includes commitments to reform planning laws, improve childcare support, and overhaul welfare systems to boost productivity and living standards. However, critics have raised concerns about the long-term consequences of higher borrowing costs and structural deficits, which could potentially overshadow these short-term gains.

As the UK’s economy continues to recover, the OECD’s report serves as a reminder of the trade-offs between fiscal stimulus and long-term financial stability.

BAE Systems, the UK’s largest defense company, has announced plans to recruit a record 2,400 apprentices, undergraduates, and graduates next year, marking a major step in its commitment to workforce development. This new intake will bring the total number of trainees across the FTSE 100 company to 6,500, making up around 15% of its UK workforce.

Known for building the UK’s nuclear submarines and fighter jets, BAE Systems currently employs 100,000 people worldwide. The company has increased its investment in skills development each year since the Covid-19 pandemic, with next year’s £230 million spend on education initiatives pushing its total investment in training to over £1 billion since 2020.

The funding will support a range of programs, including apprenticeships, graduate schemes, and upskilling opportunities for current staff. Additionally, BAE will continue backing outreach efforts, such as its third skills academy, which recently opened in Glasgow.

Charles Woodburn, CEO of BAE Systems, emphasized the importance of investing in talent to maintain the company’s competitive edge. “With thousands of roles open across the country and our exciting high-technology programs, there has never been a better time to embark on a career with us,” he said.

The company’s recruitment drive has garnered praise from government officials, with Defense Secretary John Healey calling BAE’s early careers initiatives crucial for strengthening national security and nurturing future industrial leaders. “This investment is a vote of confidence in the UK as a hub for highly skilled jobs and cutting-edge employment,” Healey remarked.

Diversity continues to be a priority for BAE Systems. Nearly a third of this year’s new apprentices are women, and one in three new graduates comes from an ethnic minority background. Francesca Di Mascio, 27, an electrical engineering apprentice at BAE, shared her experience: “This apprenticeship is a great opportunity to earn while you learn. For the first time, I feel truly valued in a business.”

BAE’s recruitment plans reflect a strong commitment to building a skilled and diverse workforce capable of meeting the evolving demands of the UK’s defense sector and beyond. The company’s investment in training aims to ensure that the next generation of workers is ready to tackle the challenges posed by high-tech defense and engineering fields.