Although Rachel Reeves insists the Spring Statement will contain ‘no policy announcements’, past experiences suggest a late policy twist can’t be ruled out.
Tomorrow (3rd March) Chancellor Rachel Reeves is expected to deliver the government’s annual Spring Statement in the House of Commons.
Ahead of the statement, which is due to take place in the afternoon – though no time has been confirmed – Reeves said she plans to simply welcome the latest forecasts from the independent Office for Budget Responsibility (OBR) and highlight progress on the cost of living.
However, since the chancellor came into post 18 months ago, all of her announcements have sparked controversy. Within weeks of coming to power, Reeves cut the winter fuel allowance for UK pensions and at her first autumn budget she raised national insurance contributions by £25bn.
What’s more, during the last Spring Statement it was revealed the government planned to cut welfare benefits in a bid to save around £4.8bn.
By contrast, a Treasury spokesperson told The Guardian, ‘The era of rabbits is over’, suggesting there will be no surprise policy rabbits pulled out of the hat tomorrow.
Andrew Wishart, the senior UK economist at Berenberg, said: ‘Given the moves in interest rates lately and the monthly borrowing numbers coming in on track, I think there will be plenty of headroom, as much as there was previously, and they [the government] will be able to keep [the Spring Statement] boring.’
On 18th December 2025 the Bank of England cut interest rates to 3.75% and in January 2026 CPI inflation levels fell to 3% from 3.4% in December.
Ben Zaranko, an associate director of the Institute for Fiscal Studies explained if interest rates ‘come down this year, as they hope, inflation comes back to target, tax receipts keep surprising on the upside, it’s not going to make all the problems go away but it could definitely take the edge off.’
Meanwhile, the OBR will have to factor in more than just interest rates and inflation. In recent weeks the Treasury promised £3bn to the department for education, to support support children with special educational needs.
The fiscal watchdog will also need to consider the costs of post-budget reversals on inheritance tax for farmers and business rates.
Dr David Crosthwaite, chief economist at BCIS, said while the chancellor intends ‘to reserve major announcements, like tax increases, for the Autumn Budget with the Statement serving as an economic update’, ‘the government is not off the hook.’
He added: ‘The Spring Statement period offers an opportunity to give construction businesses and project stakeholders clear, credible signals.
‘An update on the Infrastructure Pipeline would be a good place to start. The next iteration was due in January, yet no further details have been provided.
‘The government’s private finance strategy is also overdue and could give construction businesses greater clarity on when projects are likely to come to market, and the level of investment required in skills, technology and capacity to meet demand.
‘A refreshed housing strategy would be welcome too. Housebuilding output has been sluggish amid affordability challenges and demand constraints.’
Cllr Louise Gittins, chair of the Local Government Association (LGA), said the Spring Statement should be an opportunity for the government to provide councils with better resources.
‘Councils have delivered billions of savings, while still delivering vital statutory services upon which residents rely and working hard to provide the place-making services which make communities,’ Gittins explained. ‘But councils cannot keep absorbing rising costs and demand without real consequences.
‘The current situation in which an ever-growing number of councils are reliant on selling local assets or by building up debt from borrowing in order to fund vital local services, often for the most vulnerable in society, is not sustainable.’
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