Delivering her Spring Statement speech in the House of Commons today, Chancellor Rachel Reeves said she was “not satisfied” with this, which was why the Government was “serious about taking the action needed to grow our economy”.
The OBR has increased its forecast for growth next year to 1.9% and every year after, predicting this to be 1.8%, 1.7% and 1.8% from 2027 to 2029.
Cumulative growth across the period is expected at 9.4%, up from a forecast of 9.2% in October.
Reeves said the Government would work closely with the Bank of England’s “independent Monetary Policy Committee” to meet its 2% inflation target.
Today, it was announced that inflation unexpectedly fell, but this decline was said to be short-lived.
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The Chancellor said this was down from its 11% peak under the last Government, and the OBR predicted inflation would average 3.2% this year, rising to a high of 3.8% in July. It is then expected to fall to 2.1% in 2026 and then meet the 2% target by 2027.
Reeves said the Government was “backing the builders, not the bucklers”, citing its proposals to reform planning, which she said would add almost £7bn to GDP.
“That is a serious plan for growth. That is a serious plan to improve living standards,” she added.
Reeves said there were “no shortcuts to economic growth” and this required “long-term decisions”.
She added: “It will take time for the reforms that we are introducing to be felt in the everyday economy.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Spring Statement 2025: Prediction for UK economy growth halved to 1%
