UK Economy Forecast for Slightly Slower Growth in 2026, OBR Reports
Chancellor Rachel Reeves has unveiled updated economic forecasts from the Office for Budget Responsibility (OBR) in the House of Commons, indicating that the UK economy is set to grow at a slightly slower pace in 2026. The OBR has adjusted its GDP profile, predicting reduced growth next year but anticipating faster expansion in the subsequent years of 2027 and 2028.
Detailed Growth Projections and Economic Outlook
The specific growth forecasts provided by the OBR outline a nuanced economic trajectory. GDP is projected to increase by 1.1 per cent in 2026, followed by 1.6 per cent in both 2027 and 2028, and 1.5 per cent in 2029 and 2030. These adjustments are attributed to factors such as lower net migration, though the average growth across the entire forecast period remains largely unchanged, suggesting overall economic stability.
In a significant development, GDP per capita is now expected to grow by 5.6 per cent over the course of the Parliament. This translates to individuals being forecast to be over £1,000 a year better off by the time of the next election, highlighting potential improvements in personal financial well-being despite the near-term slowdown.
Chancellor's Commitment to Economic Reshaping and Family Protection
Amid these forecasts, Chancellor Reeves has made a firm commitment to safeguarding families, particularly in light of heightened fears over energy bills following recent geopolitical tensions, such as strikes involving Iran. She emphasized that her plan is to "reshape the economy" and asserted, "The plan that I have been driving forward since the election is the right one." This statement underscores her confidence in the government's economic strategy and its focus on long-term growth and resilience.
The announcement comes as part of the Spring Statement, where Reeves vowed to protect both the economy and households from external shocks. The OBR's revised projections serve as a critical backdrop for policy decisions aimed at balancing growth with stability in the face of global uncertainties.
