Chancellor Rachel Reeves has presented her Spring Statement, revealing that the Office for Budget Responsibility (OBR) has revised the UK’s GDP growth forecast for 2026 down to 1.1%, from a previous projection of 1.4%. Despite this, economic growth projections for 2027 and 2028 have been lifted to 1.6% for each year. The OBR also adjusted its inflation forecast to 2.3% for 2026, down from 2.5%, but said the outlook would be “particularly uncertain” following spikes in gas and oil prices due to events in the Middle East. Ms Reeves also told MPs that the unemployment rate is “set to peak later this year,” with the OBR saying it is on track to hit 5.33% in 2026 before falling 4.9% in 2027 and 4.4% in 2028. Office for National Statistics data shows that unemployment lifted to a five-year-high of 5.2% in the three months to December. Ms Reeves said her fiscal decisions are “starting to pay off,” adding: “Borrowing is down, living standards are up, and the economy is growing.”

Traders have drastically reduced their expectations for interest rate cuts by the Bank of England, dropping from nearly 90% to just 15%. This shift follows a surge in energy prices since the onset of conflict in Iran. Robert Wood from Pantheon Macroeconomics said: “Great uncertainty about the path for energy prices… means more chance that the Monetary Policy Committee holds the Bank Rate in March.” Inflation remains above the Bank’s 2% target, further complicating the outlook for rate adjustments.

Business leaders have expressed frustration over the Government’s lack of a growth strategy, following Chancellor Rachel Reeves’ Spring Statement. They described it as a “missed opportunity” to alleviate high business rates and employment costs. With the Office for Budget Responsibility lowering economic growth forecasts from 1.4% to 1.1%, Anna Leach, chief economist at the Institute of Directors, stated: “The UK’s growth outlook is increasingly fragile.” Tina McKenzie, the policy chairman at the Federation of Small Businesses, said Ms Reeves had “missed the chance” to address upcoming cost increases, while Ros Morgan, head of Heart of London Business Alliance, which represents over 500 businesses, said the Chancellor needs to fix the “broken” business rates system.

The construction sector is on a fragile path to recovery, according to a report by McBains. Growth is expected to reach 4.5% in 2026, driven by infrastructure projects in defence, transport, and energy. However, housebuilding and commercial construction face challenges from high financing costs, planning delays, and labour shortages. Colin McCaffrey, director at McBains, said that recovery “will be uneven, with sectors like housebuilding and commercial projects struggling for momentum.” The report also highlights that rising minimum wages are a concern and could potentially deter employers from hiring apprentices.

Investors are projected to face an additional £3.7bn in capital gains tax (CGT) annually, with the Treasury expected to collect £5bn by 2030/31. This increase follows a strong stock market performance, particularly in early 2026. The Office for Budget Responsibility (OBR) attributes this rise to higher equity prices, which are forecasted to be 8% above previous estimates. The OBR said: “In this forecast, higher equity prices drive an increase of around £3.7bn a year on average in CGT receipts.” The annual tax-free allowance has been reduced significantly, impacting more ordinary investors.

Dealmaking in the UK reached a 26-year high in January and February, with foreign buyers acquiring UK companies. The total value of mergers and acquisitions hit $89.9bn, the highest since 2000. Notable transactions included a multibillion-dollar deal for insurer Beazley. However, the number of deals decreased from 471 last year to 304 this year.

Foreign takeovers of UK firms reached a four-year high of £65bn in 2025, according to the Office for National Statistics. The number of deals, totalling 799, is the highest since 2022. Analysts expect deal volumes to remain steady, with values likely to rise significantly.

Government tax policies are projected to increase the UK’s tax burden to a “historical high” of £1.4trn a year by 2030/31, according to the Office for Budget Responsibility. This represents 38.5% of GDP, surpassing previous forecasts. The freeze on income tax thresholds will pull millions into higher tax brackets, generating an estimated £67bn for the Treasury. Anna Leach, chief economist at the Institute of Directors, noted that the rising tax burden could hinder economic growth, saying: “Projected growth has been lowered in the short term as the impact on the labour market and confidence from chaotic policy management, and increased employment costs, weigh more heavily than anticipated.”

Analysis by Lubbock Fine suggests that the accountancy sector has fallen behind the legal profession when it comes to diversity across its leadership. The report shows that across 220 accountancy firms analysed, 50% had at least one woman at the board or partnership level, compared with 71% in the 258 law firms analysed. Hazra Patel, a partner at Lubbock Fine, says the analysis suggests that accountancy firms “still have a lot to do to improve female representation in senior leadership roles.” Fellow Lubbock Fine partner Stephanie Turner said: “Bringing more women into board-level roles is challenging as it takes time and investment, but it pays off,” adding: “Firms with diverse leadership have stronger cultures and perform more effectively.” It is noted that regulators and professional bodies covering the accountancy sector, including the Financial Reporting Council and ICAEW, have said that companies with women in leadership positions have a better workplace culture and see a stronger financial performance.

The Financial Conduct Authority has warned that the supervision of anti-money laundering controls at professional services organisations could be improved and urged bodies supervising the firms to fix the problems.