UK Economics Chart Pack (Sep. 2026)

With inflation and the resulting drag on households’ real incomes yet to peak, we doubt the surprising resilience of activity in the first half of the year will continue in the second half of this year. The tight fiscal backdrop, which has been compounded by the latest rise in gilt yields, means that any loosening in fiscal policy relative to current plans in the Budget on 28^th October, and therefore any boost to GDP, will probably be small. The softening in GDP growth that we expect and the weak labour market explains why we think CPI inflation will fall to 2.0% in 2027 and Bank Rate will be cut from 3.75% to 3.00%. That said, the latest rebound in energy prices means the risks to both our inflation and Bank Rate forecasts are skewed to the upside.

We’ll be discussing the state of the UK economy, our latest analysis on the Autumn Budget and what to expect from the Bank of England’s September meeting in a 20-minute online briefing at 2pm BST on Wednesday 9^th September. (Register here.)