Rachel Reeves has insisted Labour has “the right economic plan” amid growing uncertainty from the Middle East conflict, as the Office for Budget Responsibility (OBR) warned of potentially “very significant” impacts on the UK economy. The chancellor delivered a spring forecast against a backdrop of surging energy prices, with oil and gas prices jumping sharply as investors fret over the war.
The OBR’s new forecasts, published alongside Reeves’s statement, showed GDP growth downgraded to 1.1% for this year, down from a previous forecast of 1.4%, after weaker-than-expected data in late 2025. However, growth is expected to strengthen in future years, reaching 1.6% in 2027 and 2028. The UK’s tax take is set to rise to a record high of 38.5% of GDP by 2030-31.
Reeves noted that “inflation is down, borrowing is down, living standards are up and the economy is growing,” but economists warned that the extra headroom against fiscal rules could be wiped out by the energy price spike. Brent crude rose 6.2% to $82.55 a barrel, while UK month-ahead gas prices jumped 21%, hitting a three-year high. Stock markets fell globally, with the FTSE 100 suffering its biggest one-day fall in 11 months, losing 2.75%.
Separately, Reach, the owner of the Mirror, Express and Star, saw its share price plunge over 12% after reporting a 46% year-on-year decline in traffic from Google in the second half of its financial year. The publisher said digital page views fell 8% overall, and it is taking a “cautious approach” to digital performance amid fears of a “Google zero” future driven by AI summaries.
