A post by @FirstSquawk on X.
BOE: GOVERNMENT BUDGET LIKELY TO CUT INFLATION BY 0.25 PERCENTAGE POINTS BY Q2 2027, THEN RAISE BY THE SAME AMOUNT A YEAR LATER AS THE EFFECT UNWINDS.
@FirstSquawk on X
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The Bank of England said the government's budget is likely to reduce inflation by 0.25 percentage points by the second quarter of 2027, before adding the same amount back a year later as the effect unwinds. The estimate implies a temporary disinflationary impact that reverses fully by roughly mid-2028, leaving the underlying inflation path unchanged over the medium term. The timing matters for rate-cut expectations, since a near-term inflation reduction could give the central bank more room to ease before the effect flips. Watch the BoE's next Monetary Policy Report projections and market pricing for the 2027 policy path.
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Named in this story
Bank of England, UK Government