Our team is closely following the impact of today’s ‘Spring Statement’ by Chancellor Rachel Reeves. We’ve picked out the five key things you need to know today. Over the coming days and weeks, as more details emerge, we’ll be guiding our clients on what it means for them.
1. Growth forecast officially cut
The Office for Budget Responsibility (OBR) has revised down its projection for UK economic growth in 2025 to just 1%, Chancellor Rachel Reeves confirmed in today’s (26 March) Spring Statement.
Back in October 2024, the OBR had forecast a 2% rise in GDP for 2025, but reports leaked in February suggested the agency was considering a downward adjustment.
Speaking in Parliament today, Reeves stated that due to “heightened global uncertainty,” the independent body had indeed lowered its expectations for growth.
2. ISA overhaul off the table…for now
Chancellor Rachel Reeves made no immediate announcements regarding changes to the ISA system. In the lead-up to her speech, speculation within the financial sector raised concerns that the allowance might be slashed from £20,000 to £4,000 per year. However, this possibility was dismissed ahead of her statement in the Commons.
Potential adjustments could still emerge in the full Autumn Budget later this year.
There had been suggestions that Reeves might target ISA allowances – it’s worth remembering that interest in ISAs is tax free.
Despite growing calls for a simplified ISA framework, the chancellor’s address today focused instead on welfare reform, defence investment, and a renewed effort to combat tax evasion. For the 2024/25 tax year, the annual ISA cap remains at £20,000, which can be allocated across different ISA categories.
The government is currently exploring potential ISA modifications to address what some have described as excessive “hoarding” of Cash ISAs, which could result in savers missing out on stronger returns from Stocks and Shares ISAs.
Treasury documents released following today’s Spring Statement indicated that upcoming ISA reforms aim to “strike the right balance” between cash and equity investments, helping savers achieve “better returns, foster a stronger retail investment culture, and support economic growth.
3) Inflation declines further
UK inflation saw a steeper-than-expected drop in February, falling from 3% to 2.8% just as Chancellor Rachel Reeves prepared to present her Spring Forecast.
Data from the Office for National Statistics (ONS) revealed that the UK Consumer Prices Index (CPI) unexpectedly dipped to 2.8% in February, although core inflation remained stubborn at 3.5%.
4) HMRC’s latest tax clampdown
Reeves also confirmed an intensified crackdown on tax evasion and avoidance, aiming to generate an additional £1bn for the Treasury. She stated that the government will outline measures to “increase the number of tax fraud prosecutions by 20% annually.” These initiatives, she added, will contribute to raising total revenue from tackling tax non-compliance to £7.5bn.
5) More new homes…but where?
Reeves reinforced the government’s commitment to significantly boosting housebuilding across the country, emphasising the economic benefits it could bring.
As part of proposed planning and infrastructure reforms, mandatory housing targets for local councils will be reinstated, and restrictions on developing grey belt land will be eased. While many will welcome the prospect of increased housing supply, some may be less enthusiastic—especially if construction is set to take place in their local area!