The Times They Are A-Changin’

NatWest's latest economic update argues that while political leadership in the UK may be changing, the fundamental economic challenges facing the country remain largely unchanged, including fiscal constraints, inflation pressures and sluggish growth.

• Following Prime Minister Keir Starmer’s resignation, attention has shifted toward the next government’s ability to balance fiscal rules against growing spending demands and rising borrowing costs.
• The Bank of England kept rates unchanged at 3.75%, citing slowing economic activity and signs of easing inflation, though policymakers remain concerned about energy-driven price pressures later this year.
• Consumer confidence remains weak, labour markets are stabilising rather than improving, and government borrowing continues to exceed forecasts, creating upward pressure on gilt yields and limiting fiscal flexibility.

Explore the full briefing for a broader assessment of UK politics, inflation, labour markets, housing and the outlook for monetary policy.