Spring Statement 2026
The Chancellor’s Spring Statement provided a summary of the OBR Economic and fiscal outlook with several key updates.
The Chancellor’s Spring Statement, presented to Parliament on 3 March 2026, focused heavily on the Office for Budget Responsibility (OBR) Economic and fiscal outlook. While light on new tax measures, it reinforced existing commitments to fiscal stability.
The statement highlighted a cautious optimism for growth while acknowledging that inflationary pressures remain a concern for the medium term.
Economic forecasts
The OBR has slightly upgraded its growth forecast for the UK economy in 2026, pointing to stronger-than-expected consumer spending and a gradual recovery in business investment. However, the Chancellor warned that the global economic environment remains fragile, citing ongoing geopolitical tensions and the lingering effects of high interest rates. Inflation is expected to hover around the Bank of England's 2% target, but the OBR cautioned that energy prices remain a significant risk factor.
No major tax changes
Unlike an Autumn Budget, the Spring Statement is traditionally intended to be an economic update rather than a major fiscal event. The Chancellor stuck to this convention, resisting calls for immediate tax cuts. Income Tax and National Insurance thresholds remain frozen, continuing the policy of 'fiscal drag' that draws more taxpayers into higher brackets as wages rise.
Support for business investment
While there were no new headline tax cuts, the Chancellor did announce minor adjustments to capital allowances designed to encourage business investment in green technology and digital infrastructure. Additionally, funding was allocated to expand regional innovation hubs, aiming to boost productivity outside of London and the South East.
Public finances
The OBR noted that government borrowing is slightly lower than previously forecast, providing the Chancellor with a modest amount of fiscal 'headroom'. However, with a general election looming in the next two years, it is widely expected that this fiscal space is being preserved for more significant tax announcements in the upcoming Autumn Budget. For now, the message remains one of steady, cautious economic management.
Disclaimer
The information contained in this article is for general guidance on matters of interest only. It should not be used as a substitute for consultation with professional accounting, tax, legal, or other competent advisers. Before making any decision or taking any action, you should consult a Kingscott Dix professional.