Spring Forecast Summary

Yesterday, the Chancellor delivered the Spring Forecast. We look at the takeaways for the small business community.

growth forecasts are weaker for 2026

The Offfice of Budget Responsibility has reduced the forecast from 1.4% to 1.1%. 1.6% is then pencilled in for 2027 and 2028.

inflation is Steady

The Chancellor predicts that the target of 2% inflation will be met although she acknowledged the forecast did not factor in the war in Iran and its effect on oil prices which spiked last week.

unemployment is rising

Unemployment is due to peak at 5.3% in 2026 but is predicted to fall to 4.1% by 2030.

Interest Rates

The Office of Budget Responsibitity was predicting that interest rates which affect homeowners personal budgets will rise albeit less than predicted in the November budget, but once again this prediction comes with the caveat that numbers were crunched before the Iran war.

TAX

The forecast is not designed to set coming tax rates in the next Tax Year. Those announcements were made in the Autumn Budget. Part of the picture of forecast however remains the fiscal drag of freezing thresholds.

SUMMARY

The Chancellor insists the economy is turning a corner. In touch with our clients as we are, it more feels to me like the economy in a precarious position with the potential to go either way. Part of the story of the Spring Forecast is how little there is to report. Business owners will have been hoping for good news and a way forward but very little transpired.