The Bank of England expects Rachel Reeves's budget will reduce the UK's headline inflation rate by as much as half a percentage point next year. In a boost for the chancellor after last month's high-stakes tax and spending statement, Clare Lombardelli, a deputy governor at the central bank, said its early analysis showed the policies would lower the annual inflation rate by 0.4 to 0.5 percentage points for a year from mid-2026.
As she stood at the dispatch box, Reeves opens by saying it was deeply disappointing and a serious error on their part, meaning the OBR. We are rebuilding our economy, she says, pointing to trade deals with the US, India and the EU, planning reforms, an overhaul of the visa system and a change of fiscal rules to raise public investment to a four-decade high.