Spring Statement - UK growth forecast halved for 2025

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