Whichever way events unfold over the next few days, it seems clear the next Prime Minister (Rishi Sunak or Penny Mordaunt) will have to work hard to restore credibility in the eyes of the markets by revealing measures to fill the hole in the public finances. That leaves the risks to our forecast that the economy will enter a recession involving a peak-to-trough fall in GDP of around 2% skewed to the downside.
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