Spring Statement Live: UK growth cut for 2026 but Reeves touts future forecasts

Welcome back to the City AM liveblog.

Rachel Reeves delivered her Spring Statement today, as the Office for Budget Responsibility published its updated forecasts for the years ahead.

The Chancellor was handed quite a hefty blow with the UK’s growth estimate for 2026 slashed to 1.1 per cent from 1.4 per cent the year prior.

Though Reeves was quick to tout an uplift in 2027 and 2028’s figures. The OBR expects GDP to come in at 1.6 per cent for the two years, at just a 0.1 per cent increase, meaning 2026’s downgrade was more than the combination of the two uplifts.

For the years 2029 and 2030, growth of 1.5 per cent was left unchanged.

Still, Reeves defended the government’s economic plan, insisting it was “right” as the world becomes even “more uncertain”.

The message faced a significant overshadowing from the brewing tensions in the Middle East, which sent havoc through markets and commodities on the home front.

Economists are sounding the alarm on inflationary consequences after UK gas prices surged by over 90 per cent in just under a week.

Its struck a chord of worries with the price of gas briefly hitting 151p a therm amid the conflict, a level not seen since February 2023, before easing back to around 148p.

Sanjay Raja, chief UK economist at Deutsche Bank, said the flare up in prices could “raise inflation and dampen growth”.

And on the political front, the government is facing heat from the US amid the war in Iran.

President Donald Trump has said he is “very sad” with Prime Minister Sir Keir Starmer for his delayed decision to allow the US to use its military bases.

Trump said the UK-US relationship “is obviously not what it was”.

We’ll be bringing you the latest on the Spring Statement and all the reaction to the war in the Middle East.