BoE and Treasury at Odds About the UK’s Long-Run Capacity to Grow 

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The 110-billion-pound gap 

The short-run outlook for the U.K. economy is now looking brighter than last year. Business and consumer sentiment improved in the beginning of 2023 and so did the Bank of England (BoE)’s forecast for the economy. Instead of a shallow recession, the BoE now expects GDP to remain flat in the first half of 2023. Monetary policy makers also see an improved employment outlook and no longer expect U.K. living standards to fall this year. 

However, there is a massive disagreement between U.K. policy makers. On the one hand, you have the BoE in control of

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