Spring Statement overview

On Tuesday 3^rd March, Chancellor Rachel Reeves delivered her Spring Statement, revealing the latest independent forecasts from the Office for Budget Responsibility (OBR) and how the government intends to steer the economy through global uncertainty.

Despite the brevity of the Spring Statement – the Chancellor reiterated that this was simply a forecast update, rather than a major fiscal event like the Autumn Budget – there were still a few things contained within that were well worth listening out for.

Here are the key points from the Spring Statement at a glance:

Economic forecasts

The Office for Budget Responsibility (OBR) has predicted growth of 1.6% in both 2027 and 2028, which is slightly higher than the 1.5% that was laid out in the Autumn Statement.

GDP growth for 2026 is now forecast at around 1.1%, down from earlier projections made and inflation is expected to fall, with estimates for 2026 now around 2.3%, bringing it back toward the Bank of England’s 2% target.

Unemployment is projected to rise in the near term, peaking at around 5.3% in 2026, before gradually declining in subsequent years.

Public finances

Reeves highlighted several points she sees as evidence of progress. Firstly, Public Sector borrowing is expected to fall in the coming years, which will help stabilise debt.

She also says that her fiscal “headroom” – or the buffer within existing borrow/spend forecasts – has grown, which has given more flexibility for future budgets.

Housing and energy

A recurring theme was how external factors, particularly the ongoing conflict in the Middle East and the recent attacks, are complicating the UK’s economic landscape.

Official forecasts were finalised before recent sharp rises in global energy prices, meaning actual inflation and borrowing pressures could be higher than current projections indicate. Reeves was quick to reassure everyone that her plans for stability and long-term growth would be an efficient shield against shocks. However, analysts warned that surging oil and gas costs could undermine the expected drop in inflation and fuel fresh cost-of-living pressures if geopolitical turmoil persists.

In housing, average interest rates on existing mortgages are predicted to rise from 4.1% this year to 4.5% by 2030, lower than estimated, and UK housebuilding is set to fall from an average of 260,000 a year in the early 2020s to 220,000 in 2026/27, before rising to 305,000 a year by 2030/31.

Immigration

Updated forecasts suggest annual net migration will be about 60,000 lower than previously projected in November, mainly because more UK nationals are expected to leave the country.

Looking ahead, overall net migration is predicted to sit somewhere between 200,000 and 300,000 each year through to the end of the decade, with figures likely to move within that range rather than follow a steady path.

Stephanie Hurst