If the Chancellor, Rachel Reeves, is going to continue to meet her fiscal rule with a buffer of £9.9bn, she will probably have to raise £18-28bn in the Autumn Budget, mostly via higher taxes. We suspect households and banks will bear the brunt of higher taxes and the impact on the economy over the next year will be weaker consumer spending than otherwise, higher inflation and an even worse stagflationary dilemma facing the Bank of England.
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