Britain will be the second worst performing economy in the G20 next year, according to the Organisation for Economic Co-operation and Development.

The OECD expects a growth rate to 0.8% in 2024, meaning the UK’s performance will only be stronger than Argentina’s economy, which is projected to contract by 1.2%.

The global economy has also been downgraded, with China, France and Germany, and the wider eurozone likely to see slower than expected growth.

The OECD says growth is being held back by high core inflation and restrictive monetary policy, which central banks have warned will persist into next year.

Inflation data for the UK is due out on Wednesday while the US Federal Reserve and Bank of England will decide this week whether to impose a further rise in interest rates. The European Central Bank raised its three benchmark interest rates last week.

Responding to the OECD forecast, Chancellor Jeremy Hunt said: “Today the OECD have set out a challenging global picture, but it is good news that they expect UK inflation to drop below 3% next year.

“It is only by halving inflation that we can deliver higher growth and living standards. We were among the fastest in the G7 to recover from the pandemic, and the IMF have said we will grow faster than Germany, France, and Italy in the long term.”

The OECD’s prediction comes amid forecasts that oil prices could soon top $100 a barrel on the back of Saudi Arabia and Russia reducing production.

On Monday the price of Brent crude, the global benchmark, rose by almost 1% to close in on $95 per barrel, its highest since November.

Prices have risen from about $75 per barrel at the start of July and have climbed for the past three weeks.