Next UK government will have limited fiscal space

Significance The party has been cautious regarding its economic plans, reflecting the difficult fiscal situation it will encounter should it win in July. Low growth and rising debt mean that Labour would have to choose between raising taxes or reducing spending. Impacts The greater the margin of its election victory, the more space Labour would have to strengthen trade ties with the EU. The Bank of England is unlikely to cut interest rates at its meeting on June 20, instead waiting until August or September to do so. Economic challenges could see public support for a Labour government fall relatively quickly after the election.