The United Kingdom's (U.K.'s) new Labour government, formed after the general election in July 2024, is due to present its first budget on Oct. 30, and faces challenging policy trade-offs given the U.K.'s constrained fiscal headroom. We forecast the U.K.'s general government deficit will total 5.2% of GDP in 2024, higher than we previously projected, but will reduce gradually thereafter with net general government debt peaking at almost 100% of GDP in 2025. Economic growth has proven stronger in the first half of 2024 and we have revised up our growth forecast to 1.0% in 2024 with a subsequent slight further acceleration in growth to 1.7% by 2027. We affirmed our 'AA/A-1+' unsolicited sovereign credit ratings on the U.K. and
