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UK Budget Expected to Reduce Inflation by Up to 0.5%, Bank of England Confirms The Bank of England has indicated that the latest UK Budget could cut inflation by between 0.4% and 0.5% next year, according to Ms. Lombardelli, the Bank’s deputy governor for monetary policy. UK inflation currently stands at 3.5%, with forecasts from the Office for Budget Responsibility (OBR) projecting it will fall to 2.5% next year before returning to the Bank’s 2% target by 2027. Ms. Lombardelli explained that the anticipated reduction is primarily a mechanical effect of changes in energy prices, fuel duty, and measures affecting electric vehicles and rail fares. “That will just shift inflation. That is by far the biggest impact for us,” she said. Chancellor Reeves’ Budget included a 5p cut in fuel duty extended until September next year, removal of green levies from energy bills and general taxation, and the freezing of rail fares until March 2027—the first freeze in decades. These measures are projected to save households around £88 per year, with an additional £59 saved from scrapping a customer-funded home insulation scheme. However, the Budget also introduces a new road tax for electric and some hybrid vehicles starting in April 2028. Electric car drivers will pay 3p per mile and plug-in hybrids 1.5p per mile, with charges rising annually with inflation. On economic growth, Ms. Lombardelli said the Budget’s impact is “quite small,” but noted a short-term boost of 0.2% to GDP in 2027. Conservative leader Kemi Badenoch criticized the Budget, claiming it has pushed up inflation due to tax and spending decisions. #Binance #Inflation #Write2Earn #UpdateAlert #cryptofirst21
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