Politics latest: Chancellor to deliver spring forecast – Greens leapfrog Labour into second place in poll
Politics latest: Chancellor to deliver spring forecast – Greens leapfrog Labour into second place in poll
The Chancellor, Rachel Reeves, will unveil her Spring forecast this afternoon, coinciding with the Greens surpassing Labour to claim second place in recent polling. Meanwhile, the Prime Minister has defended his choice to refrain from joining the US-Israeli military strikes. Stay updated as developments unfold.
Reeves is set to argue that her financial decisions have bolstered the UK’s resilience against global economic turbulence. This comes amid ongoing tensions in Iran, surging energy costs, and a climate of economic unpredictability. She will acknowledge the conflict’s indirect effects but maintain a measured tone in the Commons, as the duration and impact remain uncertain.
Opposition lawmakers will press her on the defence budget shortfall, urging caution with proposed fuel duty hikes starting in September. Reeves aims to reinforce her stance that recent measures—such as cutting energy bills—were necessary to stabilize public finances. She will emphasize the government’s strategy to reduce living costs, lower borrowing, and stimulate economic growth.
Fiscal Strategy and Policy Adjustments
This Spring forecast will not introduce new policies or tax reforms, as Reeves plans to focus on the autumn budget. However, adjustments made since her last budget, including changes to farm inheritance tax and business rates, as well as £3.5bn allocated to special education needs, are expected to contribute to the existing fiscal headroom of £21.7bn.
Analysts will derive insights from the current budget and public debt figures, as the Office for Budget Responsibility (OBR) has opted not to provide a formal evaluation. Reeves’s fiscal target remains to achieve a surplus in the current budget—excluding investment—by 2029/30.
Economic Outlook and Challenges
The forecasts will reflect both optimism and caution. Reeves will highlight declining interest rates and inflation, which are falling faster than anticipated. Conversely, critics will point to revised growth projections and rising unemployment as areas of concern. The OBR is anticipated to revise growth estimates downward from the 1.4% forecast in November, as recent data underperformed expectations.
Reeves is likely to assert that her plans will exceed these forecasts. She has also planned a speech later this month detailing further measures to boost growth, including planning reforms, which she may hint at today.
Unemployment and Political Implications
Unemployment rates are projected to rise to 4.9% this year, slightly below the Bank of England’s 5.3% estimate. Youth unemployment remains a critical issue, with Reeves set to elaborate on this later. The Spring forecast will serve as a key moment for her party, as they prepare for the Gorton and Denton by-elections and consider whether to shift leftward to counter the Greens’ rise in progressive politics.
The latest Sky News poll, released today, places the Greens ahead of Reform, adding pressure to Labour’s position. This shift is likely to intensify tensions within the political landscape.
“If international oil and gas prices go up by 20%, that’s 1% higher inflation and half a percent lower growth. And you cannot ignore that kind of impact on the economy,” warned former Conservative Chancellor Sir Jeremy Hunt. He noted that during his tenure from 2022 to 2024, he had to allocate nearly £100bn to assist with energy bills. Hunt cautioned that the Iran war could exacerbate energy costs and inflation, suggesting the government may need to respond with targeted measures if the conflict persists.
