26 Mar 2025
Chancellor Rachel Reeves announced 'no further tax increases' in the 2025 Spring Statement.
The Chancellor's Autumn Budget contained a record £40 billion in tax increases. However, it did not raise personal taxes including, Income Tax, employee National Insurance contributions (NICs) or VAT.
Ms Reeves had pledged one fiscal event a year and confirmed that no taxes would be raised at the Spring Statement.
Instead, the Chancellor made a number of announcements on spending and economic forecasts.
The forecast from the Office for Budget Responsibility (OBR) halved the UK's growth in 2025 from 2% to 1%.
However, Ms Reeves pointed out that the Organisation for Economic Co-operation and Development (OECD) downgraded this year's growth forecast for every G7 economy.
The OBR forecasts show that inflation will average 3.2% this year before falling 'rapidly', meeting the Bank of England's 2% target from 2027 onwards.
Ms Reeves said that defence spending will increase to 2.5% of GDP, by reducing overseas aid. This means an extra £2.2 billion for the Ministry of Defence in the next financial year to address 'increasing global uncertainty'.
The government will spend a minimum of 10% of the MoD's equipment budget on innovative technology, boosting production in places such as Derby, Glasgow and Newport.
In addition, the Chancellor said that planning reforms will put the government 'within touching distance' of hitting its target of 1.5 million new homes over the course of this Parliament.
Ms Reeves said that this will increase the level of real GDP by 0.2% by 2029/30, adding £6.8 billion to the economy.
The Chancellor said: 'Our task is to secure Britain's future in a world that is changing before our eyes. The threat facing our continent was transformed when Putin invaded Ukraine. It has since escalated further and continues to evolve rapidly.
'At the same time, the global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies.'