The Chancellor, Rachel Reeves, delivered her Spring Forecast 2025 on Wednesday 26 March.
Keeping to her promise of one fiscal event per year, she made no new tax announcements. Instead, she focused on measures to boost housebuilding and defence spending while making substantial welfare cuts.
The Office for Budget Responsibility (OBR) has lowered the UK’s 2025 growth forecast from 2% to 1%, but it expects improved growth in the years leading up to 2029. Reeves acknowledged the challenges, stating that achieving economic growth will require time, tough decisions and persistent effort. However, she mentioned that people would be ‘on average over £500 a year better off’ under a Labour government – a figure she claimed the OBR has confirmed.
Labour’s welfare cuts are expected to save £4.8 billion, with reductions deeper than initially anticipated. Day-to-day spending remains safeguarded, except for the aid budget. Defence spending is set to increase by £2.2 billion next year, aiming for 2.5% of GDP in the future. Due to Labour’s planning reforms, housebuilding is projected to reach its highest level in 40 years.
What could the Spring Forecast mean for you?
Our comprehensive guide to the Spring Statement 2025 looks at the key announcements and their potential impacts on your finances or business. If you would like to learn more or discuss how the announced measures could affect you, please contact us for further details.