The Bank of England has kept interest rates steady at 4%, citing a delicate balance between inflation pressures and sluggish economic growth, with policymakers noting signs of a softening jobs market and cooling inflation.

Economists predict the UK's third-quarter growth will be only 0.2%, below the Bank's forecast of 0.4%, with inflation expected to rise to 4% in September, complicating monetary policy decisions.

The upcoming Monetary Policy Committee meeting on November 6 is expected to consider interest rate cuts, but persistent inflation at 3.8% and cautious outlooks may delay such moves.

External factors like the US trade war and domestic trade tariffs are contributing to the UK's economic challenges, causing a 'bumpy landing' with dampened consumer and business spending.

Despite a projected 1.3% growth in 2025, making the UK the second-fastest growing G7 economy, this is insufficient to prevent upcoming tax hikes, as the government faces fiscal pressures.

The Treasury is focusing on supporting growth through infrastructure investments and easing regulatory burdens amid ongoing economic uncertainties.

The Chancellor has acknowledged the long-lasting impacts of Brexit, recent tax hikes, and downgraded productivity forecasts, highlighting strained public finances and global economic uncertainties.

Recent data shows unemployment has risen to its highest level since 2021, coupled with slower private sector wage growth, raising concerns about a potential economic 'bumpy landing'.

Weak retail sales and consumer concerns over tax hikes are further dampening economic momentum, reflecting cautious spending across households and businesses.

After a strong first quarter of 0.7% GDP growth, the UK economy has slowed, partly due to higher taxes and employer National Insurance Contributions introduced last year.

Economists warn that high interest rates, increased taxes, and weak global activity will likely keep growth sluggish in the near term, with expectations of continued deceleration into Q4.

The upcoming UK Budget on November 26 is highly anticipated, with signals pointing to tax hikes and spending cuts to meet fiscal targets amid ongoing austerity and economic challenges.

Finance Minister Rachel Reeves faces pressure to balance the budget without raising main taxes, as weak growth and rising inflation threaten public finances.