Overview
- The Bank’s early analysis matches the OBR, pointing to a 0.4–0.5 percentage point reduction in headline CPI for a year starting mid‑2026.
- Most of the impact stems from taking green levies off household energy bills, with additional effects from freezing fuel duty and rail fares.
- Several MPC members struck a hawkish tone, warning about inflation persistence tied to administered prices and behavior after years of high inflation.
- Markets are pricing a 25 basis point cut at next week’s policy meeting, which would lower Bank Rate from 4% to about 3.75%.
- The OBR projects the budget lifts inflation by roughly 0.1 percentage point in the following two years, even as GDP sees only a small near-term boost.