In today’s briefing:
- UK: Fiscal Measures Against Inflation
UK: Fiscal Measures Against Inflation
- The UK government doubled down on its energy price support, subtracting 0.4pp from our Oct-22 inflation forecast. The risk of the ONS not counting it is now worth 0.8pp.
- Other measures may follow later, like removing the 5% VAT on electricity bills. Changing the headline VAT rate is a risk attracting significant market attention.
- A 2.5pp VAT cut would probably take almost 1pp off headline inflation within two months. Some firms may take the opportunity to restore their profit margins.
Before it’s here, it’s on Smartkarma
