Headline: Reeves Defends Economic Plan as OBR Updates Growth and Inflation Forecasts
- Mar 3
- 1 min read
Why this matters: The forecasts shape expectations for taxes, spending and interest rates. Global instability could alter the outlook significantly.
Chancellor Rachel Reeves delivered her Spring Statement on the UK economy.
She said the government has restored stability in an “uncertain” global environment.
The Office for Budget Responsibility forecasts 1.1% growth in 2026.
Growth is projected at 1.6% in 2027 and 2028, and 1.5% in 2029 and 2030.
Unemployment is expected to peak at 5.3% this year before falling to 4.1% by 2030.
Inflation is forecast to reach the 2% target later this year.
Current inflation stands at 3% in the year to January 2026.
Forecasts do not account for potential energy price shocks from Middle East conflict.
The OBR warned such shocks could significantly impact UK and global economies.
Government borrowing is forecast around £8bn lower than in November projections.
Fiscal headroom increased to £23.6bn, slightly above previous estimates.
Tax receipts are projected to reach a historic high of nearly 43% of GDP by 2030-31.
House prices are expected to rise broadly in line with average incomes.
Business groups said the growth message feels “at odds” with current pressures.
Reeves pledged further economic policy announcements in a forthcoming speech.
What’s next: The autumn Budget may require tax or spending adjustments if fiscal pressures intensify. Further economic policy details are expected in coming weeks.
Comments