Chasing Unicorns in the Spring Statement

In the shortest Spring Statement in recent years the Chancellor was determined that we should all congratulate the Government on the success of its fiscal and taxation policy to improve Britain’s growth and economic outlook and debt forecast. However, with plenty of bluster and little detail, it was something of a non-event.

That said credit where credit is due, debt projections produced by the Office of Budget Responsibility (OBR) for the November Budget are now outdated with debt forecast to be £6bn lower this year and £4bn lower per year by 2029/30 and £8bn lower per year by 2030/31 than was projected just four months ago. Whilst this means that the Government is still borrowing to meet its day to day spending commitments the rate of increase has slowed and the interest payments needed to fund the debt will be lower leaving more cash available for public services. However, let’s be clear, total Government debt will still be equal to 95% of GDP by 2030/31, which doesn’t seem like much of success story whatever the Chancellor may think.

There was reasonable news on economic growth too. Despite growth slowing from 1.4% in 2025 to a forecast of 1.1% in 2026, there was a slight upgrade to the forecast to 1.6% in 2027 and 2028 and 1.5% in 2029 and 2030. This is hardly the “gangbusters” growth of the late nineties or the noughties, but upgrades to growth in the last couple of years have been hard to find like unicorns and hens’ teeth but a forecast growth upgrade is a forecast growth upgrade, and should improve economic performance, job prospects, and standards of living.

Let’s turn to job prospects – not the Chancellor’s, behave!! Unfortunately, in the short-term, unemployment is to continue rising this year and hit a peak of 5.5% in 2026, up from 4.75% in 2025, which is one third of a percentage point higher than predicted in the November Budget. That doesn’t sound like much but is an extra 100,000 jobs being lost and brings total unemployment within a whisker of the psychologically (and politically) important marker of there being 2 million people unemployed. The rate of unemployment will then fall and remain at around 4% from 2030 – but that is still four years away.

There was some noise from the Chancellor around the growth in GDP per person, which of course should improve living standards. However, to quote the OBR “The trajectory of real GDP per person depends on the outlook for productivity growth, which is highly uncertain.” Nothing is guaranteed then.

And here’s the rub, with the Chancellor spending (not much of) her 30 minutes cherry picking limited amounts of positive data from the OBR’s forecast, and quite a lot of her 30 minutes filling her allocated time with platitudes I was left with one question – why is it none of us feels any better off?

There seems to be a disconnect between the Westminster bubble where economic growth upgrades directly translate into improved living standards and the rest of Britain where food, energy, childcare, fuel, and transport price increases make us all feel poorer when coupled with frozen tax thresholds, frozen tax reliefs and allowances and increased rates of tax.

The Chancellor can talk of stability, economic growth, improving living standards and improving the lives of working people, but this working person and millions of other working people will not actually take what the Chancellor says at face value and believe what they are hearing until they really feel better off.

And that in my view is the biggest challenge the Chancellor faces, lets hope she’s equal to it.

Dominic Bourquin