If the Chancellor raises taxes by around £38bn (1.1% of GDP) in the Budget on 26th November as we expect, that may knock 0.2 percentage points off our 2026 GDP growth forecast of 1.2%. But it supports our view that CPI inflation will fall further than most expect next year and that the Bank of England will cut interest rates from 4.00% now to 3.00% in 2026 rather than to 3.50% as investors anticipate.
We’re hosting a 20-minute online briefing at 3pm GMT on Wednesday 19th November to discuss what to expect in the Budget and what it could mean for the UK economy, UK housing and the financial markets. (Register here.)
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