Trusted by over half a million customers

Our service is rated 'Excellent' on Feefo

Over 2,000 experts ready to help

What you need to know about the 2026 Spring Statement

diane-caplehorn.jpg
Diane Caplehorn
Head of Partnerships – Direct, read more

5 minutes

Written: March 10, 2026

View of the Houses of Parliament with the Thames in the foreground

After a heavy Autumn Budget in November 2025, some people expected another round of major updates, however the 2026 Spring Statement arrived with a surprisingly calm tone. The Chancellor, Rachel Reeves’ update mainly focused on creating stability with continuity and long-term planning.

That being said, though there were no updates that’ll necessarily cause businesses and individuals to overhaul their current plans, there are a few things that they should take stock of and understand.

What’s included in the Spring Statement

Many economists had predicted this would be a low-key event, and it seems they were correct. Rather than announcing new taxes or spending commitments, the Chancellor gave the UK an economic update. For businesses and individuals, you could almost hear the audible sigh of relief when they heard there wasn’t any sudden changes to their budgets – no surprise taxes and no new support packages to wrap their heads around.

It’s expected that this may continue to be the trend going forward. That the government will hold off making any bigger updates until the Autumn Budget, making that the main fiscal event each year and the Spring Statement will be used to update progress and share forecasts. This was something that Reeves said she hoped to do when she came into office in 2024.1

Let’s look at a few of the highlights:

1. Inflation is improving, but global risks could still push costs up

One of the most positive updates from the Spring Statement was that inflation is falling more quickly than previously expected.

The latest data from the Office of National Statistics (ONS) shows inflation fell to a 10-month low of 3% in January 20262. While this is still slightly off the Bank of England’s target of 2%3, the Office for Budget Responsibility (OBR) forecasts that it will meet this target in late 2026 and continue into 2027.

While this is very encouraging, analysts have warned that the ongoing conflict in the Middle East could make the inflation rate more volatile4.

2. Growth expectations are more cautious and point to a slow recovery

In the statement, the OBR also updated its latest growth forecast. Unfortunately, it’s less optimistic than before, and they now expect the economy to grow by 1.1%. For businesses, lower growth often means slower demand and potentially more hesitation from investors.

The Chancellor did emphasise that the UK is following the right economic plan, however she also acknowledged that international uncertainty is creating challenges and making it more difficult to predict. Recent data from ONS showed that the UK economy did grow in Q4 of 2025, but only by a meagre 0.1% which shows how fragile the recovery still is5.

3. Borrowing is lower but long term pressures are building

On the other hand, there’s some positive movement on the public finances front. Borrowing is £18 billion less than it was forecasted in the Autumn Budget. Reeves was pleased to report she was on target to meet her target borrowing spend with £23.6 billion to spare6.

What this means for businesses and individuals: long term spending pressures remain including as the rising defence commitments and the cost of an ageing population. Some say this could mean tax rises are still on the horizon, however the Spring Statement didn’t allude to this7.

4. Wages, rules and tax thresholds are squeezing employers

Unfortunately, the OBR announced that unemployment is predicted to rise to 5.3% this year with younger workers feeling the brunt of the impact.

From a business perspective, employers are preparing for the rise in the National Living Wage increase (that was announced in the Autumn Budget) is due to take effect from April 2026. The hourly rate for staff aged 21 and over will rise to £12.71 (for someone working full-time (37.5 hours), that equates to £24,784.50 a year8). 

Businesses are also dealing with new employment legislation like the Employment Rights Act and frozen tax thresholds are also adding to the pressures that businesses are facing. As tax bands aren’t rising with inflation, more employees are falling into the higher tax brackets even though their actual pay has only risen slightly. This effect, known as fiscal drag, increases the pressure on employers to offer higher wages in order to keep pace with the cost of living, while also juggling higher associated employment costs such as National Insurance contributions.

This creates a ripple effect as employees’ disposable income reduces, meaning they are less likely to spend money at yours and other’s businesses.

What this all means for businesses and individuals

In summary, nothing major has changed in this Spring Statement. For businesses that’ve grown used to dealing with sudden fiscal shifts, this stability might be very welcome. There’s no new policy surprises, so companies can use this period to reassess and plan ahead.

It’s expected that the Autumn Budget later this year is when any bigger decisions are likely to be announced.