The City expects a cut in interest rates on Thursday but the economic prospects for 2026 complicate the picture

In the economic gloom of Labour’s first year in power, Rachel Reeves has had a reliable shred of comfort to cling to: five times since the general election, the Bank of England has cut interest rates.

This week, in all likelihood, the chancellor will get a sixth to shout about, as Threadneedle Street prepares to reduce borrowing costs in an early Christmas present that will be seized upon by the Treasury.

GDP fell by 0.1% in October as activity failed to regain momentum after cyber-attack on Jaguar Land Rover

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Britain’s economy shrank unexpectedly in October as consumers held back on spending before Rachel Reeves’s budget, and car manufacturing struggled to recover from the cyber-attack on Jaguar Land Rover.

Figures from the Office for National Statistics (ONS) showed gross domestic product fell by 0.1%, after a 0.1% drop in output in September. City economists had predicted a 0.1% rise in October.

PwC warns that future of a generation is at risk and that jobs crisis is costing UK economy up to £26bn a year

Britain is slipping down the global league table for youth employment amid a dramatic rise in worklessness that is putting a generation’s future at risk, research has warned.

Sounding the alarm over a worsening youth jobs crisis, the report from the accountancy firm PwC said Britain’s economy was missing out on £26bn a year because of sharp regional divisions in youth joblessness.

Chancellor defends budget but tells MPs there were ‘too many leaks’ and that and much of them were inaccurate

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Rachel Reeves has condemned leaks before her make-or-break budget as “unacceptable” as she revealed her income tax U-turn was agreed in partnership with Keir Starmer.

Defending her tax and spending plans before MPs on the Commons Treasury committee, the chancellor said she had been frustrated by “leaks that were clearly not authorised” before her November speech.

In a boost for Rachel Reeves, deputy governor says analysis shows chancellor’s policies will lower annual rate next year

The Bank of England expects Rachel Reeves’s budget will reduce the UK’s headline inflation rate by as much as half a percentage point next year.

In a boost for the chancellor after last month’s high-stakes tax and spending statement, Clare Lombardelli, a deputy governor at the central bank, said its early analysis showed the policies would lower the annual inflation rate by 0.4 to 0.5 percentage points for a year from mid-2026.