Chancellor Rachel Reeves has insisted that Labour has “the right economic plan” after the Office for Budget Responsibility (OBR) downgraded its growth forecast for 2026. In her spring statement to MPs, Reeves acknowledged that GDP growth this year is now expected to be 1.1%, down from a previous forecast of 1.4%, following weaker-than-expected data in the final quarter of 2025. However, she noted that growth is projected to strengthen in later years, reaching 1.6% in 2027 and 2028, and remaining at 1.5% in 2029 and 2030.
The OBR also warned that the conflict in the Middle East could have “very significant” impacts on the UK and global economies. Oil prices rose 6.2% to $82.55 a barrel, while UK month-ahead gas prices jumped 21%, hitting a three-year high. The FTSE 100 fell 2.75%, its biggest one-day drop in 11 months, amid investor concerns over rising energy costs and geopolitical instability.
Reeves said she is in close contact with Bank of England Governor Andrew Bailey and will meet representatives of the North Sea energy industry. The OBR’s forecasts show that the UK’s tax take is set to rise to a record high of 38.5% of GDP by 2030-31. The chancellor’s headroom against her fiscal rules has increased slightly, but economists warned that this could be wiped out by the surge in energy prices caused by the Middle East crisis.
In a separate development, Reach plc, owner of the Daily Mirror and Express, 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 this year. Chief Executive Piers North noted that most of the decline came from Google Discover, and that AI features may be changing the internet landscape.
