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Economy will give the next PM a rough ride

The next Prime Minister may walk into 10 Downing Street while the economy is in the middle of a recession and just a month before a rise in CPI inflation to over 10% in October marks the worse point of the cost of living crisis. That’s why one of their first tasks will probably be to oversee a loosening in fiscal policy that heightens the economy’s inflation headache. Meanwhile, the latest data and some speeches by MPC members suggest that the Bank of England may have edged a bit closer to administering a 50 basis point hike in interest rates in August rather than a 25 basis point hike.

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