While markets took a sanguine view of the UK budget this week, the measures represented a further up front boost to public spending, paid for largely by back loading tax-raising measures.
UK GDP growth was robust in the early part of the year (partly due to tariff front-running) but has since moderated.
Government borrowing is projected to fall from 4.5% of GDP in 2025-26 to 1.9% in 2030-31, while the current budget deficit will be closed - meeting a key fiscal rule set by the Chancellor.
The tax hikes are expected dampen GDP growth, albeit as referenced above, they are back-loaded.
