Growth upgrade gives Sunak cushion

The Office for Budget Responsibility forecast that the UK economy would settle 2% below pre-pandemic levels, rather than the 3% projected in March, implying a reduced long-term impact from COVID. These improved forecasts gave Rishi Sunak a £35bn windfall to work with, which he has split up between public borrowing, higher spending on public services and tax cuts in areas like business rates and alcohol duties. However, as with all Budgets, there were some niggles, with one coming in the form of the proposed highest tax burden since the post-war period at 36.2% of GDP. Although the FTSE All-Share was less affected, UK markets on the whole took growth news positively with gilts having their largest one-day rally since March.