Morgan Stanley's Bruna Skarica pointed out in the report that the UK economy is expected to slow in 2026, although the predicted risks are in balance. The UK construction industry PMI data released this week showed weak activity in the industry. Bruna Skarica said: “Despite improvements on the eve of the budget announcement, the investigation continues to send signals of sluggish economic activity.” Morgan Stanley expects the Bank of England to cut interest rates to the 3.0% terminal level by June. According to data from the London Stock Exchange, the market has fully absorbed the 25 basis point interest rate cut in the first half of 2026 and the expectation that interest rates may be cut again in the second half of the year.

Morgan Stanley's Bruna Skarica pointed out in the report that the UK economy is expected to slow in 2026, although the predicted risks are in balance. The UK construction industry PMI data released this week showed weak activity in the industry. Bruna Skarica said: “Despite improvements on the eve of the budget announcement, the investigation continues to send signals of sluggish economic activity.” Morgan Stanley expects the Bank of England to cut interest rates to the 3.0% terminal level by June. According to data from the London Stock Exchange, the market has fully absorbed the 25 basis point interest rate cut in the first half of 2026 and the expectation that interest rates may be cut again in the second half of the year.