Higher taxes for businesses, a lingering drag from the previous rises in interest rates and the uncertain global backdrop will mean GDP grows by only 0.8% in 2025 and by 1.2% in 2026, which is below the consensus forecasts. The weak economy will eventually contribute to CPI inflation falling below 2.0% in 2027 and allow the Bank of England to cut interest rates from 4.25% now to 3.50% early next year rather than to around 3.75% as investors anticipate.