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Ed Smith, Head of Asset Allocation Research at Rathbones comments on the Chancellor’s ‘Polyfilla policies’

Last Updated: September 30, 2025

Before today’s announcements, public sector net borrowing was on track to increase by around £310bn this year – so, around 15% of GDP. That marks the country’s largest fiscal response in modern peacetime history, and is nearly double the peak during the Global Financial Crisis, when government borrowing peaked at 8.2% GDP. Today the Chancellor announced tax cuts and additional spending that could tally up to another £30bn.

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Investment Update: Inflation should stay well anchored

Last Updated: September 30, 2025

Will the extraordinary quantity of monetary and fiscal stimulus result in abnormally high inflation? Words to that effect form one of our most frequently asked questions this year. It’s an important one: returns from ‘fixed income’ assets such as conventional bonds can be decimated by unanticipated inflation, and although equities tend to do best in periods of slightly above-average inflation, very high inflation is a threat to their returns too.

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