Chancellor Rachel Reeves delivered her spring assertion in the present day, unveiling a £14 billion package deal of cuts and new investments aimed toward restoring the UK’s fiscal credibility and boosting long-term productiveness.
Towards a backdrop of weak progress and rising debt, Reeves outlined measures to rein in public spending, drive effectivity throughout authorities departments and spend money on essential areas corresponding to defence, housing and AI.
Listed below are the important thing highlights from in the present day’s assertion.
Fiscal outlook and debt forecast
The Workplace for Funds Duty (OBR) now forecasts a deficit of £36.1 billion in 2025-26, falling to £13.4 billion the next 12 months and returning to a surplus of £9.9 billion by 2029-30. Reeves confirmed that her new package deal of cuts has restored the federal government’s fiscal headroom to the identical £9.9 billion reported final autumn.
Welfare reform and common credit score
A sequence of welfare modifications are on the coronary heart of the chancellor’s cost-saving drive. The common credit score customary allowance will rise steadily, from £92 per week in 2025-26 to £106 by 2029-30. Nevertheless, the well being factor of common credit score will likely be halved and frozen for brand new claimants. Reeves additionally dedicated £1 billion to getting extra individuals again into work, with an extra £400 million in funding allotted to the Division for Work and Pensions. Total, these measures are anticipated to save lots of £3.4 billion.
Tax fraud crackdown
The federal government will make investments additional in HMRC to strengthen its enforcement capabilities. The intention is to spice up the variety of tax fraud prosecutions by 20 per cent yearly, elevating an extra £1 billion by concentrating on tax avoidance and fraud extra successfully.
Defence and know-how funding
A key pillar of in the present day’s assertion was a £2.2 billion enhance to defence spending, with funds earmarked for brand new applied sciences, together with air defence lasers for Royal Navy vessels. Reeves reiterated her ambition to make the UK a “defence industrial superpower”, with a concentrate on creating high-skilled jobs and strengthening provide chains.
Civil service reform and AI transformation
The chancellor confirmed the creation of a £3.25 billion Whitehall “transformation fund” aimed toward lowering inefficiency within the civil service. The funding will assist early exits for underperforming workers and funding in AI to enhance productiveness throughout departments. The transfer types a part of a wider technique to modernise the state and cut back the long-term value of public service supply.
Abroad assist lowered
In a controversial transfer, abroad assist will likely be minimize to 0.3 per cent of gross nationwide earnings, down from the present 0.5 per cent goal, saving an estimated £2.6 billion by 2029-30.
Housing and planning reforms
The OBR expects modifications to planning guidelines to ship an financial enhance of £6.8 billion over 5 years and assist the development of greater than 1.3 million new houses. These reforms are designed to sort out the UK’s continual housing scarcity whereas driving regional financial progress.
Financial progress and inflation forecasts
The UK financial system is now forecast to develop by 1 per cent this 12 months, rising to 1.9 per cent in 2026 and 1.8 per cent the 12 months after — barely improved figures from earlier estimates. Inflation is predicted to common 3.2 per cent in 2025 earlier than falling to 2.1 per cent in 2026, according to the Financial institution of England’s long-term targets.
As Reeves seeks to steadiness short-term fiscal self-discipline with long-term funding, in the present day’s assertion underlines a shift in the direction of AI-led reform, defence innovation, and focused infrastructure progress — signalling alternatives, in addition to challenges, for UK companies within the 12 months forward.
