While looser fiscal policy than previously planned will support GDP growth and inflation in 2025 and 2026, we think CPI inflation will fall a bit further next year than the Bank of England and the consensus of forecasters are expecting. As a result, we expect the Bank to cut interest rates from 4.75% now to 3.50% in early 2026, further than the low of 4.25% that investors currently expect. And although we doubt a second Trump presidency will significantly impact the UK economy, it poses a downside risk to activity and an upside risk to both inflation and interest rates.