The net fiscal giveaway of £13.9bn (0.5% of GDP) in 2024/25 in the Budget may at the margin help lift the economy out of its mild recession before an election later this year. But a big tightening in fiscal policy is still on the cards for after the election and that will probably require new tax hikes. The resulting drag on the economy may contribute to more interest rates cuts next year than most expect, to 3.00% from 5.25% now.
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