The Bank of England is tipped to cut interest rates despite Budget tensions.

The “chaos” around Budget measures may delay further interest rate cuts as the Bank of England figures through the effects of a flurry of tax rises, despite Rachel Reeves’ stated commitment to set the conditions for borrowing costs to be lowered.

The Chancellor has said curbing the cost of living was a key “ priority ” at the upcoming Budget as inflation has remained well above the Bank’s two per cent target.

She is expected to unveil targeted policies on stripping VAT from energy bills and taking green levies of the Ofgem price cap in a bid to lower prices for British consumers.

Together with an extension to income tax thresholds, thereby dampening demand, as much as 0.5 percentage points could be taken o

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