...- On Sept. 23, the U.K. government announced a plan to reduce a range of taxes, in addition to its previously communicated intentions to extend wide-ranging support to households on energy bills. - As a result, we estimate that the U.K.'s general government deficit will widen by an average 2.6% of GDP annually through 2025, while net general government debt will continue on an upward trajectory, in contrast to our previous expectation of it declining as a percentage of GDP from 2023. - Subsequent to the announcement of the plan, the sterling exchange rate depreciated significantly while government bond yields went up, prompting the Bank of England to intervene to arrest potential financial stability risks. - We consider that our updated fiscal forecast is subject to additional risks, for instance, if the U.K.'s economic growth turns out weaker due to further deterioration of the economic environment, or if the government's borrowing costs increase more than expected, driven by market forces...
