Spring Statement 2025

The Chancellor of the Exchequer presented her Spring Statement 2025 to Parliament on Wednesday 26 March 2025.

The government is focused on securing Britain’s future through its Plan for Change – driving economic growth, building an NHS fit for the future and keeping the country safe.

At the Budget last autumn, the government reset public spending, including by addressing £22 billion of in-year pressures, the vast majority of which were recurring. It put the public finances on a sustainable path, underpinned by tax reforms that protected working people and new, robust fiscal rules that embed stability, while supporting sustainable investment in public services and growth. The government also increased the National Minimum Wage (NMW), giving millions of people a pay rise, and froze fuel duty.

This stability is paying off. The Bank of England have cut Bank Rate three times since the start of the Parliament. At the end of 2024, real wages were growing at their fastest rate in over three years.

Since autumn, the world has changed. Europe is now facing a generational challenge to its collective security. Global economic uncertainty has increased sharply, growth has slowed in many of Britain’s major trading partners, and borrowing costs have risen across most advanced economies. As an open trading economy, the UK is not immune to these challenges.

But, despite a changing world, and supported by the measures that this government has taken, the economy is now forecast to grow faster than expected at the Budget last autumn, in 2026 and every year thereafter. And decisive action since the Budget last autumn means that the fiscal rules continue to be met two years early. The government has restored in full headroom to the stability rule. The investment rule is also met with a £15.1 billion buffer in the target year.

The government is now taking action to go further and faster to strengthen the UK’s security, to reform the state and to grow the economy. It is making the right choices to bring security to working people and to put more money in their pockets. The Spring Statement sets out how the government is:

• Making a fully funded commitment to increase NATO-qualifying defence spending to 2.5% of Gross Domestic Product (GDP) by 2027, including by providing an additional £2.2 billion of funding for the Ministry of  Defence (MOD) next year.

• Reforming the state to ensure public services are productive and agile, welfare spending is targeted towards those that need it the most and the tax that is owed is paid.

• Supporting growth by investing £13 billion more in capital infrastructure over the next five years, launching a construction skills package to train up to 60,000 more skilled workers, and investing an additional £2 billion in social and affordable housing.

The Office for Budget Responsibility (OBR) says that the planning reforms included in the government’s National Planning and Policy Framework (NPPF) will lead to 170,000 additional homes built over the forecast period. This increases the level of real GDP by 0.2% by 2029-30, adding £6.8 billion to the economy, and by over 0.4% in 2034-35. The government’s planning reform measures have led to the biggest positive real GDP effect that the OBR has reflected in its forecast for a policy with no fiscal cost. This helps to secure the public finances: the economic effect of government policies, driven by planning reforms, reduce borrowing by £3.4 billion in 2029-30. This improvement in the growth outlook reflects only the changes to residential planning. The government is going further and faster to drive growth through ambitious supply side reforms, including via increased capital spending, regulatory reform and the Planning and Infrastructure Bill.