When is the Spring Statement and What Might Be in It?
Chancellor Rachel Reeves will deliver the Spring Statement on 3 March. During this significant address, she will provide an update on her plans for the UK economy, including the latest forecasts for growth, inflation, unemployment, government spending, and tax income for the coming years. While the Spring Statement is not as prominent as the Budget, it still plays a crucial role in shaping future government decisions regarding tax and spending.
What is the Spring Statement and Why Does It Matter?
The Spring Statement serves as a platform for the Office for Budget Responsibility (OBR) to present its latest economic forecasts. These forecasts, released after Reeves’ speech in the Commons, are essential because they reflect the government’s financial trajectory and its ability to adhere to established tax and spending rules. The OBR is an independent body that monitors government spending and performance, conducting evaluations twice a year.
Key fiscal rules include:
– No borrowing for day-to-day public spending by the end of this parliament
– Ensuring government debt declines as a share of national income by the end of this parliament
In November’s Budget, the OBR indicated that Reeves was on track to meet the first rule with a £21.7 billion headroom, suggesting financial flexibility. These forecasts are crucial, as they may compel the government to adjust spending or tax policies if compliance with the rules is at risk.
When is the Spring Statement?
The 2026 Spring Statement is scheduled for 3 March. While the exact time of Reeves’ speech in the Commons remains uncertain, it is anticipated to occur shortly after midday. Following her address, the Treasury will release the OBR’s forecast, which is typically published independently. Last year’s premature release of the OBR’s analysis resulted in the resignation of its chairman, Richard Hughes. This year, in light of security reviews, the forecast will be published via the Treasury’s official gov.uk platform. The opposition’s response will likely come from either Conservative leader Kemi Badenoch or shadow chancellor Mel Stride.
What Might Be in the Spring Statement?
Chancellor Reeves is not expected to announce major policy changes, such as significant tax or spending adjustments, as she typically reserves these for the annual autumn Budget. This approach aims to minimize speculation around fiscal measures, which can disrupt both businesses and households. Yet, some changes, particularly related to benefits, are possible. Last year’s Spring Statement detailed benefit adjustments, although some were reversed later.
How is the UK Economy Doing?
Since taking power in July 2024, the Labour government has prioritized boosting economic growth. However, concerns persist regarding the pace of this growth. Recent statistics reveal:
– GDP growth of just 0.1% in Q4 2025, falling short of expectations.
– Annual growth at 1.3% for the entire year.
– Inflation, which peaked at 11.1% in October 2022, has cooled to 3%, the lowest rate since March 2025.
This decline in inflation has led analysts to anticipate a decrease in interest rates from 3.75% next month. However, unemployment has gradually increased, reaching 5.2% in the three months ending December, marking the highest rate in nearly five years. While average pay has been outpacing inflation, wage growth has slowed, with an annual growth rate of 4.2% (excluding bonuses) in the same period.
Chancellor Reeves stated in February that 2026 would be the year the British public starts to feel the positive impacts of Labour’s policies: “Is there more to do? Absolutely. But we’ve created the conditions for growth, and I am confident this will be the year we see the results of that.”
Conclusion
The Spring Statement on 3 March will offer critical insights into the UK economy’s current state and future direction. While no major policy shifts are expected, the economic forecasts provided will set the tone for government spending and tax strategies in the months ahead. As the UK navigates challenges such as inflation and employment, the outcomes from this statement are likely to resonate across households and businesses alike.