The Chancellor has announced the Spring Forecast in Parliament
Chancellor's economic plan is the right one as Spring Forecast shows inflation falling and borrowing down, while living standards and the economy grow, with people set to be £1000 better off.
Forecast shows borrowing is down by nearly £18 billion compared to Autumn and headroom against the stability rule has increased to almost £24 billion.
The Chancellor said her economic plan is even more important in a world that has become yet more uncertain, to secure the economy against shock and protect working families.
The Spring Forecast has shown that the government's economic plan to cut the cost of living, cut national debt and grow the economy, is the right one.
The Chancellor today set out how this government is building a stronger and more secure economy that makes every part of Britain better off. Through stability in the public finances, investment in infrastructure and reform to the economy, this government's economic plan is changing Britain for the better.
Cutting the cost of living
The OBR's forecast shows inflation, borrowing and debt interest are all falling while investment is rising. It now forecasts that inflation will return to target in the second half of this year - earlier than forecast in November - and delivering on the government's plan to ease pressure on households.
The decisions the Chancellor took at the last Budget to ease the cost of living, including reducing people's energy bills by £150 and freezing rail fares, are specifically expected to bring inflation down by 0.4ppt in 2026-27.
Easing the cost of living is the government's number one focus. That's why we are boosting the minimum wage for millions of workers, fully-funding 30 hours of free childcare, rolling out free breakfast clubs and helping family incomes by removing the two-child limit.
Cutting borrowing
The forecast shows borrowing is down by nearly £18 billion compared to the Autumn, with borrowing this year set to be the lowest in six years and falling below the G7 average for the first time in 22 years.
Already, we are expected to spend nearly £4bn less on debt interest next year than was forecast in the Autumn - money that can instead be spent on the things people rely on like our NHS and public transport.
The government is also reducing wasteful spending and driving efficiencies so that tax payer money can be spent wisely. This year was the lowest drawdown on the government's contingency pot for day-to-day spending in almost a decade, showing they are keeping public finances stable.
The forecast shows headroom to the stability rule has increased to almost £24 billion.
The Government's responsible approach to public spending means the Spring Forecast also reflects the recently announced £3.5bn of new funding for DfE in 2028-29 to support ambitious reforms to SEND. This includes over £1.8 billion in additional funding for Devolved governments through the Barnett formula.
Growing the economy
The OBR's forecast shows GDP per person is now set to grow more than was expected in the Budget - with growth of 5.6% over the Parliament. Despite the global uncertainty, Britain's economy remains strong - with faster growth than any other European country in the G7 in 2025.
The driving purpose of growing the economy is to make every part of Britain better off. The OBR has forecast that people will be over £1,000 a year better off after inflation, delivering on the government's priority to build an economy that makes working people better off.
