Spring Forecast 2026 – key points for advisers

Economic context

The Spring Statement, now known as the Spring Forecast, follows the delayed Autumn 2025 Budget and arrives only fourteen weeks later. Since November, there have been U‑turns on Inheritance Tax (IHT) reliefs and business rates. Political events over the winter have also added uncertainty.

The escalation of conflict in the Middle East is a key risk. The Office for Budget Responsibility (OBR) warns this could have “very significant impacts” on both global and UK markets. Oil prices have moved slightly higher, and gilt yields rose on the day of the speech.

The nature of this forecast

The Chancellor intends to move towards a single annual Budget – which we welcome. A more low-key approach to budgets creates more stability – vital for planning.

The Spring Forecast fulfils the OBR’s obligation to update its data but avoids a full fiscal mandate assessment. This reduces immediate political and policy pressure.

Recent data from the ONS

• GDP growth remained at 0.1% in Q4 2025; full‑year growth was 1.3%.
• Unemployment rose to 5.2%, with youth unemployment at 16.1%.
• Earnings growth slowed to 4.2%.
• CPI inflation held steady at 3.0%.
• Retail sales volumes rose by 0.1% over the three months to January.

OBR projections vs November

• Growth: 2026 downgraded to 1.1%; 2027 upgraded slightly.
• Inflation: 2026 CPI cut to 2.3%.
• Unemployment: higher throughout the next three years.
• Fiscal headroom: increased from £21.7bn to £23.6bn.
• Borrowing: slightly higher in 2026/27.
• Debt servicing: lower due to reduced interest rate assumptions.

Geopolitical risks

The OBR highlights the risk from the Middle East. At the time of writing, Brent crude oil is trading around $84, well above the $63 assumption for 2026, albeit still in line with the average of the last five years. Gilt yields have risen, and expectations for a near‑term bank rate cut have faded.

Looking ahead

The next Budget is roughly eight months away. Market conditions and OBR assumptions may shift again by then. We’ll continue to keep an eye on developments and share any implications for planning and client conversations as things evolve.