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OBR downgrades economic growth for this year, Rachel Reeves says in Spring Statement

ended 03. March 2026

Chancellor Rachel Reeves is delivering her Spring Statement.

She has just announced updated growth forecasts from the Office for Budget Responsibility (OBR), saying "average growth across the forecast period is largely unchanged".

"While the OBR has adjusted the profile of GDP so that it grows slightly slower in 2026, and faster in 2027 and 2028," she says.

The OBR has downgraded its forecast for economic growth for this year to 1.1% – it has previously forecast the economy would grow by 1.3% in 2026.

It expects economic growth to pick up in following years: to 1.6% in 2027 and 2028, and then 1.5% in both 2029 and 2030.

  • What is your reaction to the downgraded forecast in GDP?
  • Why do you think the forecast has been downgraded?
  • Is this all just going to be ripped up by the conflict in the Middle East?

Responses asap as this is breaking news.

3 responses from the Newspage community

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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
The OBR generally takes a "market snapshot" to finalize its numbers weeks before a statement. They will have missed the full weight of this week's escalation. If the conflict worsens, the "faster growth" promised for 2027 will become a mirage instead of the current distant hope. The downgrade of the 2026 growth forecast to 1.1% highlights a fragile UK economy struggling under the weight of high taxes, labour costs, and over-regulation. These projections are "stale on arrival" due to the escalating Middle East conflict. With oil and gas prices surging, the OBR’s assumptions regarding falling inflation will be invalidated within weeks. What price now on the Bank of England being forced to raise rates to combat energy-driven inflation?
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Editor
Nouran Moustafa
Practice Principal & IFA at Roxton Wealth
A downgrade to 1.1% isn’t dramatic, but it reflects a fragile backdrop. Growth hasn’t collapsed it’s just not accelerating with conviction.
The revision likely reflects weaker consumer confidence, global uncertainty and persistent cost pressures. When businesses delay investment and households stay cautious, growth softens. That’s not ideological it’s cyclical reality.
The more important point is forward momentum. The OBR still expects recovery in 2027 and beyond, which suggests this is a slowdown in pace, not direction.
As for the Middle East, markets will react quickly, but forecasts are built on central scenarios. If energy prices spike materially and stay elevated, projections will need revisiting. If volatility fades, this remains a modest recalibration not a structural warning sign.
Downgrades matter, but context matters more.
What businesses and households need now is stability and clarity not constant recalibration of expectations. Confidence drives growth.
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Editor
Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
The government talks growth but has ramped up tax, crushing the chance of growth, this is further evidence that the tax and spend policy isn't working. We've got 6 months or so till the budget and we'll have to see whether the penny drops for the chancellor.