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Thoughts on the Spending Review

ended 11. June 2025

Rachel Reeves is doing a speech on her spending review now: https://www.youtube.com/watch?v=YDvsBbKfLPA

  • What are your thoughts on the spending review and what effect will it have? Any ideas are welcome, we are trying to find a unique angle.
  • Will it have an effect on the bond market?
  • Will £39billion being spent on social and affordable housing have an effect on the housing market?

Responses ASAP please.

 

4 responses from the Newspage community

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Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
This government have aimed for growth and are investing for the long term in the hope of achieving this, but how is it going to be funded whilst we wait for nuclear reactors to come online or railways to open? Taxes are already high following the October budget hikes. This plan feels like a risky strategy to follow and could well lead to higher taxes if growth doesn't increase.
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Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
Some of the figures outlined in the spending review by Rachel Reeves today are eye-watering. £39 billion for social and affordable housing is welcome, but this will likely take years to filter through and actually make a difference. It's almost a year since the government was elected, and they've made little progress on their headline pledge to build 1.5 million new homes by 2029. What's most interesting is where the money is going to come from. It was only recently that Reeves was talking of the £22 billion black hole left by the Tories, now there seems to be money for everything and anything. Perhaps the most important part of the review is more about what hasn't been said than what has.
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Tony Redondo
Founder at Cosmos Currency Exchange
The bond market’s tolerance is being tested with 30-year gilt yields at 5.272%, well above the Bank of England’s 4.25% base rate. Economically, this is a calculated bet on the UK's productive capacity, but immediate financing costs are brutal. Bond vigilantes are watching closely. Reeves may just about get away with it as long as this level of spending is seen as productivity-enhancing versus just consumption. Politically, it’s clear this Labour government, less than 1 year into office, now sees Reform UK as its main threat.
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Keith Budden
Managing Director at Ensurety
On the face of it the spending review is good news, however much of it is incredibly long term and many of the items in it stand zero chance of being completed within the current parliament. The extra money on social and affordable housing is very welcome but will it be spent where it is most needed, and by the time they've gone through the planning process, appointment of contractors etc very few of them will have seen a shovel in the ground by 2029, let alone had properties occupied by well-deserving households.

That all said, and of course the devil will doubtless be in the detail we have not yet had time to fully review, it is clear that fears Rachel Reeves was to take an austerity-lite view of investment were misfounded. It is a bold, ambitious plan, let's just hope Labour really can generate the growth necessary to pay for it - on that the jury is not just still out, it's still enjoying its tea and biscuits and contemplating the day ahead.