Updated figures from the Office for Budget Responsibility (OBR), which were released at the same time as her statement, show inflation is now expected to fall from 3.4% in 2025 to 2.3% in 2026, returning to the 2% target in late 2026 – earlier than forecast at the Autumn Budget. The OBR then expects inflation to remain around that target level for several years.<\/p>\n
Its figures for economic growth for 2026, though, have been revised down to 1.1%, from 1.3% previously, while unemployment is forecast to peak at 5.3% this year before easing. On a more positive note, borrowing is projected to be nearly \u00a318bn lower than forecast in November, with fiscal headroom increasing to almost \u00a324bn.<\/p>\n
The Chancellor said easing inflation is central to her plan to reduce pressure on households and lower borrowing costs and she points to Treasury figures that show recent interest rate reductions are expected to save around \u00a31,300 a year on a typical new fixed-rate mortgage.<\/p>\n
In addition, the OBR is forecasting real household disposable income to grow between 0.6% and 0.9% a year from 2026 to 2030. In cash terms per person, it expects real household disposable income to rise from \u00a326,300 in 2025 to \u00a326,900 by 2030.<\/p>\n
House prices are forecast to rise between 2.4% and 2.9% annually between 2026 and 2030. In less good news, the OBR expects the average mortgage rate to increase from 4.1% this year to around 4.5% on average between 2027 and 2030.<\/p>\n
The OBR added, though, that its forecasts were finalised just as the conflict with Iran was escalating and warned the situation in the Middle East could have \u201cvery significant impacts on the global and UK economies\u201d.<\/p>\n
Since then, wholesale gas prices have rocketed, and oil has climbed above $81 a barrel amid threats to shipping through the Strait of Hormuz and repeated attacks on gas and oil infrastructure in the Gulf. It remains to be seen how long the hostilities will last or what their consequences might be, but if it results in a sustained rise in oil prices, it could cause an unwelcome and unexpected surge in inflation.<\/p>\n
Government bond yields and swap rates have already risen, and this could then feed into the price of fixed-rate mortgages as well as wider borrowing costs. It could also push up the Government\u2019s borrowing costs, and that would mean Reeves would need to push up taxes to compensate.<\/p>\n","protected":false},"excerpt":{"rendered":"
Rachel Reeves has used her Spring Statement to defend the government\u2019s economic record rather than introducing any new taxes, highlighting falling inflation, lower borrowing and rising living standards. Updated figures from the Office for Budget Responsibility (OBR), which were released at the same time as her statement, show inflation is now expected to fall from… Read more »<\/a><\/p>\n","protected":false},"author":4233,"featured_media":6107317,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[6,26,765,59],"tags":[795],"class_list":["post-6107316","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk-housing-market","category-tax-mortgages-money","category-property-investment","category-trending-news","tag-rachel-reeves"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6107316","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/4233"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=6107316"}],"version-history":[{"count":3,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6107316\/revisions"}],"predecessor-version":[{"id":6107320,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6107316\/revisions\/6107320"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/6107317"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=6107316"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=6107316"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=6107316"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}