The U.K. economy has so far evaded recession, despite multiple headwinds including elevated inflation, a rapid tightening of monetary policy and credit conditions, as well as a comparatively weak external outlook. Economic growth should remain marginally positive at 0.4% both in 2023 and 2024 before firming to 1.5% from 2025. Meanwhile, due to a combination of supply-side factors and monetary tightening effects, average inflation will fall to 2.5% in 2024 from 7.5% in 2023. We forecast the U.K.'s general government deficit will fall to 3.3% of GDP by 2026, from a projected 5.6% of GDP in 2023. Nevertheless, the U.K.'s fiscal position will remain constrained, given elevated net general government debt of 96% of GDP. We affirmed our 'AA/A-1+' sovereign
