Last week saw the Chancellor of the Exchequer, Rachel Reeves, issue the Government’s Spring Statement. Whether you are investment planning in Cheshire or beyond, these are the key points to consider.
The Office for Budget Responsibility (OBR) has revised UK growth projections to 1% in 2025, and 1.9% in 2026, followed by 1.8% in 2027. Beyond that, it predicts 1.7% in 2028 and 1.8% in 2029. According to the Chancellor, this means the economy will be larger than the forecasts in the October Budget.
Inflation is expected to experience a brief spike this year to 3.2% before dropping off to 2.1% in 2026 and 2% in 2027. As a result, interest rates, traditionally used to tame the rate of rising prices, are likely to remain higher than anticipated.
Overall living standards, though, are predicted to improve, with indicators suggesting real household disposable income will rise by over 2% in the period between 2025 and 2030. This could leave people, on average, £500 a year more well off.
It is hoped that housebuilding will boost growth, with a further 170,00 homes due to be constructed over five years, following changes to England’s planning rules.
Another growth area is defence spending. Already due to increase by £2.9 billion in 2026, it will now be allocated an extra £2.2 billion. This will work out at 2.36% of national income and will be financed partly by Treasury reserves, but also by cutting the overseas aid budget to 0.3% of gross national income in 2027.
