Economic forecasts inform decisions on public spending, taxation and household support, shaping expectations for growth, inflation and borrowing across the United Kingdom.
The Chancellor has presented the UK Spring Forecast 2026 to Parliament, alongside updated projections from the Office for Budget Responsibility covering growth, inflation and public borrowing.
The forecast sets out expectations of easing inflation, modest annual GDP growth and a declining borrowing path as a share of GDP, alongside targeted measures on energy bills, transport costs and childcare. The statement outlines the government’s fiscal position amid global economic pressures.
Presentation of the Spring Forecast
The Chancellor set out the UK Spring Forecast 2026 in Parliament, underpinned by updated projections from the OBR. The forecast covers expected growth, inflation and borrowing trends to 2030.
The OBR projects that the UK economy will expand each year across the forecast horizon, with inflation easing from previous highs and borrowing declining as a proportion of national income.
Global Backdrop and Security Context
The Chancellor framed the forecast within a backdrop of heightened geopolitical risk, including conflict in Iran and the wider Middle East, and potential pressures on global energy prices. The statement linked economic stability to defence and industrial investment.
Recent defence commitments referenced in the statement include the following:
- £650 million to upgrade Typhoon fighter jets
- Launch of a new Royal Navy frigate from Rosyth
- £1 billion helicopter deal with Leonardo
Inflation, Interest Rates and Household Measures
The Chancellor stated that there have been six Bank of England interest rate cuts since the General Election and that inflation has fallen from its peak. The Bank of England previously indicated that Budget measures, including bill support, are expected to bring inflation down slightly faster than earlier projections, while noting energy prices remain a risk.
Recently announced cost-of-living measures referenced in the statement include:
- Extension of the 5p fuel duty cut for five months
- Freeze on prescription charges for a second successive year
- Freeze on regulated rail fares
- £150 reduction in energy bills from next month
Cost-of-living measures referenced in the statement
| Fuel duty | 5p cut extended for five months |
| Prescription charges | Frozen for a second consecutive year |
| Rail fares | Regulated fares frozen |
| Energy bills | £150 reduction funded through government support |
Growth Outlook and GDP per Head
The OBR forecasts real GDP growth of 1.1% in 2026, 1.6% in 2027 and 2028, and 1.5% in 2029 and 2030. Compared with the Autumn 2025 forecast, growth is slightly weaker in 2026 but stronger in 2027 and 2028.
Treasury analysis of OBR data suggests GDP per person is projected to rise by around 5.6% over the course of the Parliament, compared with the previous one, if forecasts are realised.
OBR real GDP growth projections
| 2026 | 1.1% real GDP growth |
| 2027 | 1.6% real GDP growth |
| 2028 | 1.6% real GDP growth |
| 2029 | 1.5% real GDP growth |
| 2030 | 1.5% real GDP growth |
Labour Market and Family Support Policies
The OBR expects unemployment to peak later in 2026 before falling in each subsequent year, ending the forecast period at around 4.1%. The statement highlighted policies aimed at supporting families and children.
Measures referenced include expanded childcare provision and free breakfast clubs in primary schools. The government has also committed to scrapping the two-child limit in benefit calculations.
Borrowing, Debt and Fiscal Headroom
According to the OBR, public sector net borrowing is forecast to fall from 4.3% of GDP in 2025–26 to 3.6% the following year, then to 2.9%, 2.5% and 1.8% by 2029–30.
Cumulative borrowing over the period is projected to be nearly £18 billion lower than expected in the Autumn 2025 outlook.
The Chancellor reported that headroom against the main stability rule in 2029–30 has increased to about £23.6 billion, with headroom against the investment rule at roughly £27.1 billion. Debt is projected to be lower in each year of the forecast compared with the previous outlook.
Forward Policy Direction
The Chancellor referenced an upcoming Mais lecture where she intends to outline three economic priorities: strengthening global trade relationships, backing innovation and artificial intelligence, and rebalancing economic geography.
The government linked these priorities to existing measures on infrastructure, skills funding, planning reform and trade agreements with India, the United States and the European Union.
Stakeholder Comments
Ministerial Comments
The Chancellor of the Exchequer said;
“The Office for Budget Responsibility’s latest forecast shows inflation easing, growth continuing and borrowing falling as a share of GDP.”
“We are extending targeted support on energy bills, transport and childcare while maintaining stability in the public finances. In a period of global uncertainty, this forecast sets out our approach to managing the economy and supporting households.”
To Conclude
The UK Spring Forecast 2026 sets out the Office for Budget Responsibility’s updated projections for growth, inflation and borrowing to 2030. It outlines a path of modest annual expansion, easing price pressures and declining borrowing as a share of GDP.
The statement also references household support measures and defence commitments within the wider fiscal framework presented to Parliament.
Sources: HM Treasury and The Rt Hon Rachel Reeves MP.
Prepared by Ivan Alexander Golden, Founder of THX News, an independent news organisation delivering timely insights from global official sources. Combines AI-analysed research with human-edited accuracy and context.
