On Wednesday 28 October the government will present its Budget. Beforehand, it is worth looking at what independent economists expect. HM Treasury collects their forecasts every month in a single comparison. The October edition was published on 21 October and covers 18 forecasts submitted between 9 and 16 October.
According to the average of independent forecasts, the UK economy will grow by 1.3% in 2026 as a whole (annual average) and by 1.2% in 2027. CPI inflation in Q4 2026 is expected to be 3.6% (average forecast for Q4 2026), and 2.5% in Q4 2027.
The unemployment rate (LFS measure) is expected to be 5.1% in Q4 2026 (average of independent forecasts for Q4 2026) and 5.0% in Q4 2027. Bank of England Bank Rate is expected to be 3.9% in Q4 2026 (average forecast for Q4 2026) and 3.8% in Q4 2027.
The spread is wide for inflation in Q4 2027: from 1.6% (lowest forecast) to 3.6% (highest). For interest rates in Q4 2027, forecasts range from 3.3% to 4.3%. These are averages and ranges of independent forecasts, not OBR or government forecasts. The Treasury stresses that they are the views of the institutions themselves, not the government.
What it means for you
- Businesses: growth of around 1% a year means a slow economy. Do not count on a rapid rise in demand. Plan hiring and stock cautiously.
- Loans and mortgages: economists do not see rapid rate cuts. Variable-rate repayments are unlikely to fall much within a year.
- Workers and families: prices are still rising faster than the Bank of England would like (the target is 2%). Unemployment of around 5% means a tougher job market than a few years ago.
Our assessment
These numbers show what the government brings into the Budget: weak growth, stubborn inflation and little room for giveaways. We expect a cautious Budget rather than big tax cuts. Forecasts, however, are only forecasts. The wide spread for 2027 inflation shows that even experts are unsure. Energy and oil prices could change everything.
What to do
- Before 28 October, review with your accountant your plan for salaries, dividends and investments for the next tax year.
- If your mortgage’s fixed-rate period ends in the coming months, compare offers now.
- On Budget day, read the official documents on the HM Treasury website, not “leaks” on social media.
Source: GOV.UK – HM Treasury, “Forecasts for the UK economy: October 2026” (21.10.2026).
We assess factual corrections and substantive responses. Verified changes are reflected in our reporting.
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