The sacking of the Chancellor and the U-turn on corporation tax might not be enough for the government to regain the full confidence of the financial markets. For that to happen, more may need to be done to fill the remaining fiscal hole and/or the Prime Minister may need to be replaced. Less loose fiscal policy would lessen one source of upward pressure on inflation and, consequently, interest rates. But the robustness of core inflation in the US in September increases the chances that the UK will suffer a similar problem.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services