The strong start to the year shouldn’t be mistaken as a sign the UK economy will be able to shrug off the large rises in business taxes that took effect in April and the lingering uncertainty over US tariffs. Instead, the further fall in business confidence in Q2 suggests that underlying economic activity is flatlining at best. It may be another six months or so before this contributes to a more comfortable outlook for inflation. Eventually, though, the Bank of England may be able to cut interest rates from 4.25% now to 3.50%.
We'll be discussing the outlook for UK fiscal policy and the wider economy shortly after the Chancellor's Spending Review is released in a 20-minute online Drop-In at 3pm BST on Wednesday 11th June. (Register here.)
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