Chancellor Philip Hammond has received a pre-Budget boost as the OECD upgraded the UK's growth forecast for this year.

The Organisation for Economic Cooperation and Development pencilled in expansion of 1.6%, up from its previous estimate of 1.2% in November.

But the Paris-based think-tank stuck to its prediction that the pace would slow to 1% next year as Brexit negotiations intensify and rising inflation dampens consumer spending.

The rise in the cost of living has been driven higher by the collapse in the value of the pound since the EU referendum.

The OECD report came a day ahead of updated forecasts from the independent Office for Budget Responsibility (OBR), to be revealed as Mr Hammond delivers his Budget.


The OBR is also expected to upgrade its outlook for the UK.

Britain's economy performed better than expected in the wake of the Brexit vote last year, though gross domestic product (GDP) growth of 1.8% for 2016 was still a slowdown on 2015's 2.2%.

Economic indicators for the start of this year have pointed to further deterioration.

The OECD revised its forecasts in its interim economic outlook.

It said: "In the United Kingdom, the pace of expansion in 2016 was lower than in previous years, despite support from resilient household spending, actions by the Bank of England and adjustment to the fiscal stance following the Brexit vote.

"UK growth is expected to ease further as rising inflation weighs on real incomes and consumption, and business investment weakens amidst uncertainty about the United Kingdom's future trading relations with its partners."