Spring Statement 2026 - An Overview

With the Government having restricted itself to one fiscal event a year in the form of the Autumn Budget, the Spring Statement is perhaps not the dramatic moment it used to be. It is more a chance for the Government to respond to events and economic forecasts than to set policy for the future. There is a challenging economic backdrop, something we have become used to in the UK in recent years, with falling growth forecasts, rising unemployment and now a quickly expanding conflict in the Middle East.

The Chancellor, in responding to the Office for Budget Responsibility this lunchtime, was quick to point totaling inflation (now at 3% under the CPI), reduced borrowing and debt levels, and the interest rate cuts (now at a base of 3.75%) from the Bank of England, which have aligned with these. She also has larger-than-expected tax receipts from January, swelling the start-of-year surplus that the Government often benefits from. The OBR has also commented that it estimates people will be £1,000 better off at the end of the current Parliament, with increased fiscal headroom also now projected.

It is not uncommon for governments to highlight the good whilst papering over the bad, but there is perhaps some logic to the Chancellor’s position. We at Leathes Prior are seeing businesses across Norfolk and beyond continue to defy the economic narrative and push forward with transactions, whether they be growth opportunities, an expansion to their portfolio, or venturing into new markets, this was highlighted in our Corporate Report for 2025 as released last week, which you can find here, with 2026 starting on a similar footing.

However, it would be remiss to look at the challenges facing many, with costs continuing to rise and many people feeling the pinch in their personal lives and in making their businesses profitable. There are a number of highlights to come from the statement this afternoon:

· As is always the case as we approach April, higher Council Tax bills face individuals, whilst the Personal Allowance (the amount a person can earn without paying tax, remains frozen at £12,570 until April 2031, it is important to remember this when the Government points to higher wages, with many being required to pay tax (or higher rates thereof) when their wages rise, but the allowances do not.

· Higher wage costs also hit employers, with the new rate of the National Living Wage soon to come into effect from 1 April at £12.71 per hour for those aged 21 or over. The government is also not yet changing course on its long term aim to equivalate the rates of the National Living Wage, despite criticism that this is increasing youth unemployment, which is at a much higher rate than the overall rate (16.1% versus 5.2%).

·  The OBR also downgraded growth expectations for 2026 (to 1.1% from 1.3%), albeit it also increased its projections for later years in the current Parliament, with an overall unchanged picture.

For many, it will also be what was not in the Spring Statement that mattered most. There was no U-turn on Plan 2 Student Loans, for example, that has become a hot topic of debate in recent weeks. Those graduates hoping to see an about face to the freeze in there payment threshold, or a reduction in interest rates, will be disappointed no doubt, and will continue to face 9% of their income being used to repay loans that, for many, continue to grow despite such payments. With the Budget occurring only three months ago, it is perhaps not surprising that no major new initiatives were announced, even if there is a clamour from many (just ask the good people of Gorton & Denton) for more to be done by the Government to address issues facing people up and down the country.

All in all, it is a challenging outlook even if the Chancellor can point to positive elements as well, whether you believe there is more positive or more negative may well depend on your political persuasion. However, as I have mentioned above, many individuals and businesses have and will continue to buck the economic trend. The UK has faced challenging times for nearly six years since the COVID-19 Pandemic began, and many would argue that times were not so rosy before that as well. However, despite this being the case, many have continued to keep calm and carry on, which is a testament to the resilience and persistence of people both here in Norfolk and beyond. Long may that continue, and may we all soon, before too long, have slightly less choppy waters to navigate.

We certainly will remain ready, no matter the outlook, to assist both individuals and businesses alike with whatever opportunities they wish to pursue, or challenges they need to overcome. If you need any assistance in the coming weeks and months, please do reach out to our team via info@leathesprior.co.uk orcall 01603 610911.