We now expect tariffs to have only a very limited impact on both prices and activity, with the AI investment boom and the immigration crackdown proving to be the bigger economic drivers. With the AI boom set to drive a resurgence in productivity, we think that, even as the curbs on immigration weigh on the labour force, GDP growth will accelerate from 2.1% this year to 2.5% in both 2026 and 2027.
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