The government has announced its Spring Forecast, normally known as the Spring Statement.
It’s being labelled as a ‘forecast’ because Labour want to do one fiscal event per year in the form of the Autumn Budget. They’re leaving this as just a forecast, an update on the state of the nation’s finances, according to the Treasury.
However, the government still have a significant financial hole to fill, so could pressure turn their hand?
We’ve also had a surprise increase in inflation since the Autumn Budget. The Office for Budget Responsibility (OBR) will be updating its growth forecast before the Spring Forecast announcement is made, which could shape the direction the announcement goes in.
Office for National Statistics (ONS) data shows that borrowing is running higher this year than predicted in the October Budget. In response to the figures, Isabel Stockton, senior research economist at the Institute of Fiscal Studies (IFS) said:
“[The] revenue data came in lower than forecast but doesn’t tell us a great deal about the overall fiscal outlook heading into the Spring Forecast. What the data do highlight is how much more the government plans to borrow this year relative to when Rachel Reeves took office as Chancellor.
“This extra borrowing in the short term is coupled with the promise of fiscal restraint in future, but it remains to be seen whether this will be enough to meet her ‘non-negotiable’ fiscal rules without further tax rises or even tighter spending plans. If – and it is still very much an if – the forecast moves against the Chancellor, she’ll face a truly unenviable set of choices – none of which are made easier by the upwards pressures on defence spending.”
Very little has been revealed at this stage, but we’ll update this article as we learn more.
When is the Spring Forecast 2025?
It will take place on March 26, 2025.
When will it start?
There isn’t a defined start time, but announcements like these usually happen after Prime Minister’s Questions which wraps up at 12:30pm. It’ll last around an hour.
Where will it be broadcast?
It will be broadcast live on the BBC and streamed on parliamentlive.tv.
What should we expect for small businesses?
Not much at the moment, in all honesty. “If the ‘fiscal headroom’ predicted at the Autumn Budget 2024 falls to or below zero, the Chancellor will have to set out steps to balance the books either by cutting government spending in the five-year period or raising taxes,” according to BDO.
There’s been an announcement of building ‘Europe’s Silicon Valley’ between Oxford and Cambridge. It is hoped to boost the economy by £78 billion over the next 10 years through infrastructure improvements and streamlined planning regulations.
Given the hit that businesses took with Employers’ National Insurance (plus an increase to the National Minimum Wage from 1 April) it’s unlikely that they’ll be struck again, at least not in the same way. Reports suggest that spending cuts are more likely than tax rises.
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