Bank of England expects budget will cut inflation by up to half a percentage point
PositiveFinancial Markets
- The Bank of England has projected that the recent budget proposed by Chancellor Rachel Reeves will reduce the UK's headline inflation rate by up to half a percentage point next year, with an expected decrease of 0.4 to 0.5 percentage points from mid-2026. This analysis was shared by Clare Lombardelli, a deputy governor at the Bank, following the chancellor's high-stakes tax and spending statement last month.
- This development is significant for Rachel Reeves as it validates her budgetary measures aimed at addressing the rising cost of living in the UK. The anticipated reduction in inflation could provide relief to consumers and businesses, potentially stabilizing the economy and enhancing public confidence in the government's fiscal policies.
- The budget's focus on reducing energy prices and freezing rail fares aligns with ongoing efforts to combat inflation amidst rising living costs. This initiative reflects a broader economic strategy to manage inflationary pressures while addressing public concerns over affordability, particularly in light of previous tax increases and economic forecasts that suggest slower growth.
— via World Pulse Now AI Editorial System
