Lessons from the past and key UK fiscal policy risks for 2026
We expect the budget deficit to halve over the next three years and reach a 24-year low in 2030/31. But the risk of it overshooting our forecast over the next few years has grown. That could happen if the political pressures on Starmer/Reeves weakens their resolve to stick to the current fiscal consolidation plans, or if the Labour Party ushers in a less fiscally responsible Prime Minister and Chancellor.
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