The Spring Statement, at a glance
- Growth forecast halved: The Office for Budget Responsibility (OBR) revised down the UK’s growth forecast for 2025 from 2% in the autumn to 1% today – a number Reeves says she’s “not satisfied with”. Longer term, however, the OBR says there will be GDP growth year on year until 2029
- ‘Two years ahead of schedule’: Reeves said Labour is abiding by its self-imposed fiscal rules and moving from a deficit of £36.1bn in 2025/26 to a surplus of £9.9bn by 2029/30 ahead of schedule
- Headroom restored: The OBR says Reeves has, indeed, restored “headroom”- the leeway to cut taxes or increase spending
- But for the opposition: Today’s numbers confirm that the UK is “poorer and weaker”, shadow chancellor Mel Stride said
- Reeves stands ground on welfare reforms: She said “it can’t be right” to write off an entire generation who are out of work and improperly using Personal Independence Payments (Pips)
- Defence in a ‘changing world’: The government will spend 2.5% of GDP on defence, which will be achieved by reducing overseas aid spending to 0.3% of gross national income. Reeves confirmed a £2.2bn funding boost for the Ministry of Defence from next year
- Inflation will be higher, then lower: The OBR said inflation in 2025 would average 3.2% – reaching the Bank of England’s 2% target from 2027 onwards
Cliff Notes – Spring Statement – UK growth forecast halved for 2025
- Chancellor Rachel Reeves says the 2025 growth estimate for the UK has been halved to 1% from 2% by the government’s official forecaster, the Office for Budget Responsibility (OBR)
- But in her Spring Statement she goes on to say the OBR has upgraded its longer term growth estimates from 2026
- Shadow chancellor Mel Stride says this year’s growth predictions have been “cut in two as a consequence of decisions and choices” that Reeves has made
- Reeves announces “final adjustments” to benefits changes unveiled last week – she says the cuts will save £4.8bn in the welfare budget
- “The global economy has become more uncertain,” she says, telling MPs she has met her stability and investment rules two years early
- New measures on to crack down on tax avoidance and evasion will make an extra £1bn in savings, she says
Additional sources
- Spring statement 2025: key points at a glance – The Guardian
- Spring Statement live: Tax burden to hit record high after growth downgrade – Telegraph
- Spring Statement 2025: chancellor to crackdown further on tax evasion – FT