Abstract
GDP is forecast to grow at a rate of 1.7 per cent this year and 1.9 per cent in 2018. Consumer price inflation is projected to peak at 3.4 per cent at the end of 2017. We expect the MPC to keep interest rates unchanged until mid-2019, despite the temporary rise in inflation. The current fiscal rule suggests further fiscal tightening is now needed in the next Parliament.
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