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UK Autumn Fiscal Statement (22nd Nov. 2023)

For more detailed analysis of the Autumn Statement, see our UK Economics Focus here.

The net new giveaway the Chancellor announced today of £14.3bn in 2024/25 (0.5% of GDP) is a bit bigger than the £10bn (0.3% of GDP) or so we expected a week ago and is designed to curry favour ahead of an election late in 2024. Note, though, that fiscal policy is still being tightened in 2024/25 and more will be needed after the next election. As such, the economic backdrop will remain challenging. In fact, a smaller fiscal squeeze may mean inflation is a bit higher than otherwise, which supports our view that the Bank of England won’t cut interest rates until late in 2024 rather than in mid-2024 as widely expected.

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