Delivered by Chancellor Rachel Reeves on Tuesday, 3 March 2026, the Spring Statement provides an updated outlook on the economy, public finances, and support measures.
1. Economic Outlook: Slower Growth but Stability Ahead
- Growth: GDP forecast downgraded to 1.1% in 2026; expected to strengthen to 1.6% in 2027–28.
- Inflation: Predicted to average 2.3% this year, easing from previous highs but remaining above the Bank of England’s 2% target; expected to return to target by 2027.
- Employment: Unemployment projected to rise to 5.3% in 2026, gradually falling to 4.1% by 2030. Takeaway: A modest economic environment where careful planning and cost management remain crucial for households and businesses.
2. Fiscal Policy: Stability Over New Measures
- Taxes: No major new tax or rate changes announced; income tax, National Insurance, and VAT remain unchanged.
- Business Planning: Certainty prioritized for businesses with ongoing emphasis on stability.
3. Public Finances: Improved Headroom
- Borrowing: Government borrowing expected to be lower than previous forecasts.
- Fiscal Headroom: Day-to-day spending: from £21.7bn → £23.6bn Debt reduction rule: £27.1bn Implication: Modest strengthening of the UK’s fiscal buffer allows flexibility while maintaining long-term discipline.
4. Support for Households and Businesses
Housing & Mortgages:- Average mortgage rates: 4.1% in 2026, rising to 4.5% by 2030, lower than previously estimated.
- Housebuilding: 220,000 homes/year in 2026/27, recovery to 305,000 by 2030/31.
5. External Risks
Energy & Geopolitics: Higher global energy prices and geopolitical tensions could impact inflation and growth. Advice for Businesses: Scenario planning, cash-flow stress testing, and ongoing cost management are critical.6. Other Key Updates
Immigration: Net migration forecast 60,000 lower than previous estimates; annual net migration expected 200,000–300,000. Revenue Impacts: Inherited farmland taxation: £100m less revenue per year. Pubs & music venues business rates relief: additional £100m annual cost.Summary – At a Glance
| Area | Key Takeaway |
| Growth | Slower in 2026, improving later |
| Inflation | Falling but above target |
| Taxes & Fiscal Change | No major new changes this spring |
| Employment | Unemployment peaks then eases |
| Business Environment | Stability emphasized; planning crucial |
| External Risks | Energy prices & global factors remain key challenges |
| Housing | Mortgages cheaper; housebuilding down short-term, recovery by 2030 |
