Spring Statement key points - 26th March 2025

Chancellor Rachel Reeves has delivered the UK's Spring Statement today, she said she will then return to the House to deliver a budget in the autumn, “in line with our commitment to deliver just one major fiscal event a year.”

Economic Growth Forecast
The Office for Budget Responsibility (OBR) has halved the UK's economic growth forecast for 2025 from 2% to 1%, citing global instability as a contributing factor. They forecast that CPI inflation will average 3.2% this year before falling rapidly to 2.1% in 2026 and meeting the 2% target from 2027 onwards.

Welfare Reforms
The government plans to reform the welfare system to make it more sustainable, protect the most vulnerable, and support people back into work.

Defence Spending
The government aims to make Britain a "defence industrial superpower" by investing in high-tech weaponry, including drones. An initial "down payment" of £2.2 billion will be allocated to the Ministry of Defence next year, with plans to increase defence spending to 2.5% of GDP by 2027.

Taxation
No new tax increases were announced. However, the Chancellor introduced measures to combat tax evasion, aiming to raise an additional £7.5 billion by the end of the decade through enhanced technology and enforcement.

Planning Reforms
Labour’s planning reforms to boost UK GDP by 0.2% in 2029-30. The OBR projects planning reforms will facilitate the construction of over 1.3 million homes in the next five years.