Live: Chancellor Rachel Reeves promises growth in spring statement

Rachel Reeves said she has the “right economic plan” for the UK despite the budget watchdog cutting its forecast for growth this year.

The Office for Budget Responsibility indicated gross domestic product will increase by 1.1% in 2026, down from the 1.4% it forecast in November.

But the watchdog upgraded its forecasts for 2027 and 2028 from 1.5% to 1.6%.

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Liberal Democrat deputy leader Daisy Cooper said the spring statement showed the country was “stuck in a doom loop of low economic growth”.

Ms Cooper called on the Government to take a series of steps, including getting a better trade and security deal with Europe, to “get Britain growing again”.

She said: “The country has paid the price for two anti-growth Labour budgets and the OBR today is clear, the downgrade in 2026 in growth is bigger than the upgrade in the next two years combined.

“We have got to stop the short-term cycle of short-term Treasury tax grabs over long-term growth.”

She added: “We must accept that we are stuck in a rut, stuck in a doom loop of low economic growth, and that is a big problem.”

1.34pm

The Confederation of British Industry said prioritising certainty over “chasing headlines” is the “right approach” for Rachel Reeves and now is the moment to turn “stability into momentum”.

Louise Hellem, CBI chief economist, said: “In a period of geopolitical upheaval, a spring forecast that prioritises certainty over chasing headlines is the right approach for the Chancellor.

“Reducing the cost of living, cutting borrowing and growing the economy are the right priorities, but they can’t be achieved without clear efforts to tackle the high cost of doing business. That’s what will give firms the headroom they need to invest in the technology, trade and training that drive jobs and wage growth.”

1.32pm

Rachel Reeves hit back at shadow chancellor Sir Mel Stride’s response to the spring statement, telling him his party had repeatedly got its predictions wrong on the economy.

Speaking in the Commons, Ms Reeves said: “Whether it is in office or in opposition, the right honourable gentleman’s party, and his leader, have been wrong about the economy time and time again.

“They opposed economic responsibility and backed Liz Truss. Wrong. They opposed closer ties to Europe and backed Brexit. Wrong. They opposed cuts in child poverty and want to repeat austerity. Wrong values, wrong economics, they are just plain wrong.”

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Shadow chancellor Sir Mel Stride branded the spring statement a “surrender statement”, and accused the Government of giving up on the British people.

He said: “Is that it? What utter complacency, a Chancellor in denial. She speaks of stability, what planet is (the Chancellor) on?

“She has lurched from putting up taxes to destroying growth, to destroying headroom, to coming back to putting up more taxes, more growth destroyed. Round and round we go, like a fiscal twister ripping up everything in its path.

“As our economy bleeds out, what does (the Chancellor) do? She comes to this house with nothing to say and with no plan, unless of course doing nothing is a cunning plan to avoid those U-turns further down the line.”

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The Institute for Public Policy Research said the spring statement has “bought the Government time” which it must now use including by broadening industrial strategy beyond energy into defence and advanced manufacturing,

Harry Quilter-Pinner, executive director at the think tank, said: “The spring statement delivered what many expected: a slight adjustment to the economic forecast, not a major fiscal reset.

“With less than 100 days since the last event, there were no dramatic revisions, and the Chancellor’s decision to double headroom has done its job, cushioning small forecast changes without forcing tax rises or spending cuts.

“But lower net migration poses a medium-term risk to public finances, while renewed conflict in the Middle East risks pushing up energy prices and adding to inflationary strain on households and businesses. The real test now is not short-term headroom but building on the economic momentum. The spring statement has bought the Government time, it must now use it.

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Rachel Reeves said she has “confidence” the Government can outperform economic forecasts, as she warned “progress” was opposed by her rivals in the Conservatives, Reform UK, the Liberal Democrats and the Green Party.

The Chancellor told the Commons: “In the face of global uncertainty, we beat the forecast last year. In the year ahead, the choices that we are making give me confidence that we will beat them again.

“And in the year ahead, more of the choices that we have already made will come into effect – discounts on business energy costs, trade deals with India, the US and the EU, reforms to back our entrepreneurs, investments in our infrastructure, skills funding for further education and more planning reforms.”

1.02pm

The Chancellor said borrowing is set to fall by “nearly £18 billion compared to the autumn”, with public sector net borrowing expected to fall from 4.3% this year to 3.6% next year, before hitting 1.8% in 2029-30.

Rachel Reeves told the Commons: “In their forecasts today, the Office for Budget Responsibility show that we are set to reduce borrowing by nearly £18 billion compared to the autumn.

“This year we are set to borrow less than the G7 average, something the Tories never achieved in 14 years. The forecast today shows that Public Sector Net Borrowing is set to fall from 4.3% this year, to 3.6% next year, then 2.9%, 2.5%, and 1.8% in 2029-30.”

12.59pm

Chancellor Rachel Reeves said the Conservatives and Reform UK are “united in their intention to plunge nearly half a million children back into poverty”.

She was referring to the Government’s decision to scrap the two-child benefit cap, which she described as a “moral choice”.

In her spring forecast statement, Ms Reeves added: “The Tories have said they would reinstate that destructive policy and now Reform are saying exactly the same thing. Two parties united in their intention to plunge nearly half a million children back into poverty in a single stroke.

“If you import failed Tory politicians you get failed Tory policies too. Labour and only Labour has the right economic plan for families and for our country.”

12.52pm

Chancellor Rachel Reeves told MPs that the Office for Budget Responsibility has “adjusted the profile of GDP so that it grows slightly slower in 2026 and faster in 2027 and 2028”, growing by 1.1% in 2026, 1.6% in 2027 and 2028, and 1.5% in 2029 and 2030.

She said unemployment is set to peak later this year and then fall in every year of the forecast period, ending the period at 4.1% – lower than it was at the start of the Parliament, Chancellor Rachel Reeves said.

12.50pm

The Chancellor told MPs the Government has “restored economic stability” as she pledged to leave families “better off”.

In her spring forecast statement, she said: “Stability is the single most important precondition for economic growth, that is why we have committed to a single major fiscal event each year, limiting major policy changes to the budget and giving businesses and households the certainty they need.

“Today, the new forecasts from the Office for Budget Responsibility confirm that our plan is the right one: inflation is down, borrowing is down, living standards are up, and the economy is growing.”

12.45pm

Rachel Reeves has said she is in “no doubt about Britain’s ability to navigate” challenges ahead, as she defended Labour’s performance since the 2024 election.

She told the Commons: “I want to reassure this House that I am in regular contact with the governor of the Bank of England (Andrew Bailey), with my international counterparts and with key affected industries, including our maritime sector, and tomorrow, I will meet with our North Sea industry leaders to discuss the implications that they face and work with them to manage this uncertain period.

“In an increasingly dangerous world, I am proud to be the Chancellor that is delivering the biggest uplift in defence spending since the Cold War, with £650 million committed in January to upgrade our typhoon fighter jets, a new Royal Navy frigate launched from Rosyth last week, and just yesterday, our £1 billion helicopter deal with Leonardo.

“I am in no doubt about Britain’s ability to navigate the challenges we face. The plan that I have been driving forward since the election is the right one – stability in our public finances, investment in our infrastructure including our Armed Forces, and reform for Britain’s economy.”

12.38pm

The Chancellor said her economic plan “is even more important in a world that in the last few days has become yet more uncertain” and that “it is incumbent on me and on this Government to chart a course through that uncertainty”.

Rachel Reeves began her spring forecast statement by saying: “This Government has the right economic plan for our country.”

She told MPs: “With the unfolding conflict in Iran and the Middle East, it is incumbent on me and on this Government to chart a course through that uncertainty, to secure our economy against shocks and protect families from the turbulence that we see beyond our borders.”

12.04pm

Rachel Reeves posed for pictures outside 11 Downing Street before heading to the Commons.

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The Chancellor has been seeking to boost economic growth after disappointing figures.