Find the best estate agent near you Start here
February 25, 2026
KEY INFORMATION
In the spring statement, the chancellor will provide voters, markets, and investors with an updated view on the UK economy, based on the latest estimates from the Office for Budget Responsibility (OBR).
In November 2025, the OBR predicted a 1.4% rise in economic growth in 2026, a small increase on 1.3% growth in 2025.
The OBR’s latest economic forecasts will be published in full after Reeves has delivered her speech in the Commons.
However, for the first time in its 16-year history, the OBR will not publish a formal assessment of the government’s progress towards meeting its “non-negotiable” fiscal rules, which are that budgets must be in balance or surplus by 2029/30 and that net financial debt should fall as a share of the economy by 2029/30.
Reeves announced last year that the OBR will do this only once a year, rather than twice as was the case previously. However, economists will still be able to work out for themselves how the government is faring. Ruth Gregory, chief economist at Capital Economics, predicts that there will be a small rise in the government’s headroom from £21.7 billion to about £24 billion.
She told The Times that a decline in the buffer from last November “would raise concerns that more tax hikes are on the way.” “That would lead to further unrest from Labour MPs already worried about the government’s unpopularity.”
However, a much bigger increase in the government’s headroom to more than £25 billion could also prove problematic for the chancellor if she decided against taking advantage of the situation, Gregory suggested. “In this scenario, to avoid further rebellion within the Labour Party, we think Reeves would almost certainly spend the extra headroom, thereby loosening fiscal policy relative to current plans.”
With the November 2025 Budget, the OBR accidentally published its market-sensitive economic and fiscal outlooks on the morning of Reeves’ speech. This led to the resignation of the OBR’s chairman, Richard Hughes, and following a security review, the OBR’s March forecast will be published by the Treasury using its gov.uk platform.
While the 2025 Budget was preceded by months of speculation about the tax rises that Reeves might introduce, the spring statement is likely to create fewer shockwaves. This is because the chancellor has pledged to hold only one fiscal event a year, in the autumn. As a result, tax rises and spending cuts are not expected on 3 March.
The £21.7 billion headroom Reeves gave herself in November was also to ensure she would not have to come back before the 2026 autumn Budget with further fiscal changes, experts say.
However, despite this, the spring statement will be a crunch moment for Reeves and the government as the OBR will provide an update on the outlook for the economy and the UK’s fiscal position.
While we can’t predict what Reeves will say, if you’re remortgaging in the next six months, you can act now to protect yourself from any economic fallout that could be caused by the spring statement.
If you lock in a mortgage rate now, you’ll be protected if mortgage rates rise. You can then keep it under review in case better deals appear before you complete.
Making minor changes to tax policy in the spring statement isn’t an impossibility but the government will have to be careful to avoid accusations of deploying stealth taxes, experts say.
Charlotte Sallabank, tax partner at law firm Katten Muchin Rosenman, told Morning Star: “While theoretically the chancellor has room to make ‘minor’ tax changes, it is questionable whether any tax changes resulting in an increase in tax rates or further cuts to reliefs would be seen as ‘minor’.”
“She is [therefore] unlikely to risk political and public outcry by making any allegedly minor changes that are in reality stealth tax changes that increase the tax burden on taxpayers.”
“However, this is all dependent on what the OBR forecast figures show – if they are severely adverse, ‘major’ fiscal changes could occur,” she adds.
When the Labour government took power in July 2024, it said boosting economic growth was its top priority.
However, many economists and politicians are concerned that the UK economy is not growing fast enough. GDP grew by 0.1% in the last three months of 2025, which was slightly less than expected. It grew by 1.3% over 2025.
Business owners have consistently complained about the rising tax burden, with particular concerns about how the chancellor’s hike in employer National Insurance contributions, which took effect in April 2025, has driven up the cost of hiring for firms.
Unemployment has been slowly rising, hitting 5.2% in the three months to December, which was the highest rate for nearly five years.
Inflation has cooled to 3% in the year to January. This is still higher than the Bank of England’s target of 2%, but its decline (coupled with rising unemployment figures) has led many analysts to predict the Bank of England will cut interest rates from 3.75% when it meets in March. Read more in our guide Will the Bank of England cut interest rates on 19 March 2026?
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
February 3, 2026
February 2, 2026
February 2, 2026
February 2, 2026 
