Amid disappointing UK growth, how can Rachel Reeves escape the doom loop?

"Rachel Reeves's autumn budget is not simple: Britain's economy is misfiring and things need turning around fast. Yet a fiscal consolidation on the scale the chancellor is expected to require could push in exactly the opposite direction. The latest figures from the economy are hardly encouraging. Growth slowed from 0.3% in the second quarter to just 0.1% in the third, driven down in part by the cyber-attack on Jaguar Land Rover."

"It is a potential doom loop scenario. Stronger public finances require a stronger economy. Yet large tax rises and spending cuts on 26 November could further squeeze activity amid an already weak growth outlook. In the City, this has bond market investors worried. Yet so too does a budget that would not fully cover an expected shortfall of up to 30bn against the chancellor's self-imposed fiscal rules."

"Inflation, currently at almost twice the Bank of England's 2% target, must also be kept under control. With growth weak, and confidence fragile amid budget uncertainty, it is clear the government's No 1 mission to kickstart growth is in trouble. The economy shrank in September and flatlined in August. Real GDP per head a key measure of living standards showed no growth in the latest quarter."

Britain's economy is weak, with growth slowing from 0.3% in Q2 to 0.1% in Q3 and a September contraction after August flatlining. A large fiscal consolidation could further depress activity and create a doom loop where weakened growth undermines public finances. Inflation is almost double the Bank of England's 2% target, and bond investors worry about markets and a possible £30bn shortfall against fiscal rules. Consumer-facing services and business investment fell in Q3, real GDP per head showed no growth, consumers are squeezed by high living costs, and global trade tensions have reduced exports.

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