Spring Statement 2026

The Chancellor gave her update on the nation’s economy and its prospects today against a backdrop of uncertainty caused by the Middle East conflict.

Ms Reeves had trailed her intention to be ‘boring’, with no surprises and certainly no indications of tax changes, with these being reserved for the Budget in the autumn.

What we heard today did not take into account the likely impact on cost of living and energy prices due to the war in the Middle East, although she did make reference to the events.

With her assertion that ‘My plan is the right one!’ the Chancellor claimed that the Labour Government’s focus was on security, stability and growth for the UK economy.

Referencing the Office for Budget Responsibility (OBR)’s spring forecast, published immediately after her speech, she highlighted several key projections affected by her fiscal policies:

Although unemployment is expected to peak at 5.3% this year, the OBR expects it to fall gradually to 4.1% by 2030. Ms Reeves explained how her Government’s support of efforts to get more young people into work was a priority.
The Government’s main borrowing target was expected to be met, with around £23bn to spare.
Growth in the economy is expected at 5.6% over the lifetime of this Parliament, up to 2030.
Inflation is expected to fall faster than previously anticipated. The OBR put this down to greater slack in the economy and lower food and energy prices.
Interest rates have fallen on six occasions since the Labour Government came to power. Ms Reeves claimed that, since the election, this had resulted in a £1300 reduction in a fixed rate mortgage.

The OBR forecast took into account post-Budget 2025 tax and spending changes which are going to fund the Chancellor’s proposals on special needs education, business rates relief for pubs, and the ‘farmers’ inheritance tax’ property relief increase from £1m to £2.5m.

The Chancellor repeated the already promised reduction of £150 on energy bills next month and made the eye-catching claim that ‘by the next election, after accounting for inflation, people are forecast to be £1000 better off per year’.

Finally, the Chancellor appeared to suggest that in a fortnight she would be setting out three major choices that will ‘determine the course of our economy’ including the development of ‘our global relationships’, ways of ‘backing innovation’, ‘harnessing the power of AI’ and ‘transforming our economy’ to ‘unlock opportunity throughout Britain’.

We shall see how the nation’s economic and security wellbeing is affected in the coming days and weeks by world events.