Today’s Chancellor speech I understand from city gossips that have their ear to the ground is massaging the markets for a spectacular miss on the borrowing targets. The OBR estimate of £73.5bn of borrowing in 2015/16 is supposedly going to be missed barring some stellar self-assessment receipts this month and potentially the miss will by as much as £10bn to the upside. This will result in the ChX breaking his fiscal charter before it even reaches its first birthday. The nightmare for the ChX is that GDP growth comes in above 1% YoY – and certainly is on track to – so there is no growth “knockout” triggered in the fiscal charter. This will mean he will have to come back at the Budget with big tax increases/ spending cuts to meet his rules. Against the backdrop very difficult to see UK rate rises in the foreseeable future.   



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