Soft overseas demand, the past rises in interest rates and higher taxes mean that GDP will grow by a subdued 1.3% in 2025 and by only 1.2% in 2026. And it's only a matter of time before the recent weakening in the labour market leads to slower wage growth and contributes to CPI inflation falling below 2.0% in 2027. That will allow the Bank of England to cut interest rates from 4.00% now to 3.00% in 2026 rather than to 3.50% as investors anticipate.