Abstract
GDP is expected to grow by 1.7 per cent in 2016, slowing to just 1 per cent in
2017. GDP is likely to decline by 0.2 per cent in the third quarter of this year and
there is a risk of a further deterioration. Inflation is forecast to increase significantly, peaking at just over 3 per cent at
the end of 2017. The Bank of England is expected to ‘look through’ this temporary
rise and ease monetary policy substantially in the coming months. Government announcements have effectively ‘over-ridden’ the Fiscal Charter and
borrowing is expected to increase by an additional £47 billion over the period
2016–17 to 2020–21.
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