LABOUR have been accused of “utter complacency” as Rachel Reevesrevealed that official forecasters have downgraded expectations on economic growth this year.
The Chancellor’s Spring Statement contained no policy announcements, in line with promises Labour would only have one “major fiscal event” per year.
She updated MPs on gloomy forecasts for the rest of the year, which will also see unemployment peak this year.
The Office for Budget Responsibility (OBR) indicated gross domestic product will increase by 1.1% in 2026, down from the 1.4% it forecast in November.
But the watchdog upgraded its forecasts for 2027 and 2028 from 1.5% to 1.6%.
Updating MPs on the forecasts in her Spring Statement, against the backdrop of the war in the Middle East, Reeves said: “This Government has the right economic plan for our country, a plan that is even more important in a world that in the last few days has become yet more uncertain.”
She added: “The new forecasts from the (OBR) confirm that our plan is the right one – inflation is down, borrowing is down, living standards are up and the economy is growing.”
Tory shadow chancellor Mel Stride accused Reeves of “utter complacency” as he asked: “Is that it?”
Borrowing is set to be £18bn lower than was predicted by the OBR in the autumn, Reeves told the Commons, with public sector net borrowing predicted to fall to 1.8% by the financial year ending in 2030.
The Chancellor’s fiscal headroom, the breathing room between having to cut spending or raise taxes, is up to £23.6bn by 2030 “against the stability rule” and up to £27.1bn “against the investment”, MPs heard, with debt lower than forecast in the years to come.
Reeves said: “If we stay the course and stick to our plan, and our debt interest rates return to the G7 average, we will have £15 billion a year more for the priorities of working people and to make working people better off: that is the prize on offer, that is the prize within our grasp.”
Yields, the interest paid on UK Government debt, are down meaning the cost of borrowing is lower.
The Chancellor’s Spring Statement contained no policy announcements, in line with promises Labour would only have one “major fiscal event” per year.
She updated MPs on gloomy forecasts for the rest of the year, which will also see unemployment peak this year.
The Office for Budget Responsibility (OBR) indicated gross domestic product will increase by 1.1% in 2026, down from the 1.4% it forecast in November.
But the watchdog upgraded its forecasts for 2027 and 2028 from 1.5% to 1.6%.
Updating MPs on the forecasts in her Spring Statement, against the backdrop of the war in the Middle East, Reeves said: “This Government has the right economic plan for our country, a plan that is even more important in a world that in the last few days has become yet more uncertain.”
She added: “The new forecasts from the (OBR) confirm that our plan is the right one – inflation is down, borrowing is down, living standards are up and the economy is growing.”
Tory shadow chancellor Mel Stride accused Reeves of “utter complacency” as he asked: “Is that it?”
Borrowing is set to be £18bn lower than was predicted by the OBR in the autumn, Reeves told the Commons, with public sector net borrowing predicted to fall to 1.8% by the financial year ending in 2030.
The Chancellor’s fiscal headroom, the breathing room between having to cut spending or raise taxes, is up to £23.6bn by 2030 “against the stability rule” and up to £27.1bn “against the investment”, MPs heard, with debt lower than forecast in the years to come.
Reeves said: “If we stay the course and stick to our plan, and our debt interest rates return to the G7 average, we will have £15 billion a year more for the priorities of working people and to make working people better off: that is the prize on offer, that is the prize within our grasp.”
Yields, the interest paid on UK Government debt, are down meaning the cost of borrowing is lower.
