Fiscal space increases odds of some cost-of-living relief for the UK
The lifting of Covid restrictions on January 27 adds to hopes that the worst of the pandemic is in the past and should boost consumer sentiment. But these positives face off against rising inflation and growing cost of living pressures.
What you will learn:
- Hopes that the worst of the pandemic and fear of incessant lockdowns are now in the past could deliver a boost to sentiment and encourage households to draw down more rapidly the big unplanned savings built up since the spring of 2020.
- Higher inflation has caused a jump in government debt interest payments.
- But public borrowing this year should still undershoot the OBR’s forecast, giving the Chancellor fiscal room to aid households in the face of rising fuel bills.
Tags:
Related Services
Post
BoK’s monetary policy to tighten even as hiking cycle ends
Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.
Find Out More
Post
China: Emerging green shoots in Spring, but not out of the woods
We now incorporate a faster recovery from the post-Covid exit wave and raise our 2023 full-year GDP growth forecast to 4.5% (from 4.2% previously).
Find Out More