Spring Statement 2026
London office, St Albans office
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The UK Spring Statement 2026, delivered by Chancellor Rachel Reeves, set out the government’s latest assessment of the UK economy, alongside updated forecasts from the Office for Budget Responsibility (OBR). The statement did not introduce major new tax measures or spending commitments. Instead, it focused on the direction of UK economic growth, inflation, public borrowing, and the labour market over the coming years.
Addressing MPs in the House of Commons, Reeves defended the government’s fiscal strategy in the face of global uncertainty and market volatility.
She told Parliament that the government remains committed to restoring stability and supporting sustainable growth, stating: “We are living in a more uncertain world, but our task is clear: to secure Britain’s economic future through stability, investment and reform.” The Spring Statement therefore centred on updated economic forecasts and fiscal projections that will shape policy ahead of the next UK Budget.
Top 10 key highlights from the UK Spring Statement 2026:
- UK GDP growth forecast revised down for 2026
The OBR now expects UK economic growth of 1.1% in 2026, before stabilising at an average of around 1.6% per year over the remainder of the five-year forecast period. - Productivity growth expected to strengthen gradually
Forecasts suggest UK productivity growth could rise to around 1% in the medium term, supporting longer-term economic expansion. - Inflation projected to return to the Bank of England target
UK inflation is expected to fall to the 2% target by late 2026, reflecting easing price pressures across the economy. - Public sector borrowing forecast to decline significantly
Public sector net borrowing is projected to fall from 5.2% of GDP in 2024/25 to 4.3% this year, before dropping further to around 1.6% of GDP by 2030/31. - GDP per capita growth expected to improve
A key measure of living standards, GDP per capita is forecast to rise from 0.8% in 2026 to around 1.3% in both 2027 and 2028, with the outlook stronger than previously expected. - UK unemployment forecast to rise in the short term
The unemployment rate is expected to increase from 4.75% in 2025 to around 5.33% in 2026, mainly due to new labour market entrants struggling to secure employment. - Wage growth predicted to moderate
Average weekly wage growth is forecast to slow to around 3.5% in 2026, before stabilising at approximately 2.25% in subsequent years. - Government fiscal headroom has increased slightly
The Treasury’s margin against its rule preventing borrowing for day-to-day government spending has risen to £23.6bn, offering modest flexibility ahead of future budgets. - Mortgage rates expected to remain elevated
The OBR forecasts that average UK mortgage interest rates will rise from about 4.1% this year to roughly 4.5% by 2030, although this remains lower than earlier projections. - Policy changes since the Autumn Budget reduce expected revenues
Adjustments to inherited farmland tax rules and business rates relief for pubs and music venues will each reduce Treasury revenues by around £100m per year.
To understand the full detail behind the UK Spring Statement 2026 and what the latest economic forecasts may mean for you and your business, download the full statement using the link below.
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