The government's focus on stability is welcomed by businesses of all sizes as a vital pre-condition for growth. But with consumers and businesses continuing to feel the squeeze, there is work to be done to get momentum back into the economy.
Measures in the Autumn Budget will increase firms' costs at a time when their profit margins have already been under pressure. Many businesses have told us that these measures will likely push up prices and weigh on their hiring and investment plans going forward.
Consumer spending is expected to increase over 2025, but to a lesser extent compared to our June forecast due to slower real incomes growth.
Productivity remains challenging and will lag slightly behind its lacklustre pre-pandemic trend through 2026.
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