One Four Nine Wealth Guide to the Spring Forecast 2025
Economic growth will require time, tough decisions and persistent effort.
A detailed guide of the key announcements
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.
Chancellor Rachel Reeves said that the Office for Budget Responsibility (OBR) has downgraded growth projections for 2025 but has upgraded forecasts for every year thereafter for the remainder of this parliament. She told MPs:
‘There are no shortcuts to economic growth. It will require long-term decisions. It will demand hard work. It will take time for the reforms we are implementing to have an impact on the everyday economy.’
Economy
- The Office for Budget Responsibility (OBR) downgrades growth forecast from 2% to 1%.
- Growth estimates for the next four years upgraded: 1.9% next year, 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029.
- Inflation forecast: 3.2% average this year (up from 2.6% previously forecast), 2.1% in 2026.
- 2% inflation target set to be achieved by 2027.
- Last year’s changes to England’s planning system to boost housebuilding by 170,000 over five years, adding 0.2% to the economy.
Read our Guide to the Spring Forecast 2025 below.