The Bank of England estimates that finance minister Rachel Reeves’ budget announced last month will knock off around 0.4 to 0.5 percentage points from the annual rate of inflation from around midway through next year, a top official said on Tuesday.
“We think it will reduce inflation by between 0.4 and 0.5 percent for a year from the second quarter of 2026,” Deputy Governor Clare Lombardelli told lawmakers from parliament’s Treasury Committee, citing an early analysis from BoE staff.
The Office for Budget Responsibility had previously estimated a 0.4 percentage point reduction to inflation over the 2026/27 financial year as a result of budget policies.
(Reporting by Andy Bruce and David Milliken)
