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The Office for Budget Responsibility has halved the UK growth forecast for 2025 from 2% to 1%, Chancellor Rachel Reeves has said.

However, the fiscal watchdog said that while growth has been downgraded for this year, it had been upgraded for every year after for the rest of this parliament – which is due to end in 2029.

The chancellor said she is “not satisfied with the numbers” for this year as she delivered her long-awaited spring statement in the House of Commons this afternoon.

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But, she explained, the OBR has forecast growth to hit 1.9% in 2026, 1.8% in 2027, 1.7% in 2028, and 1.8% in 2029.

She told MPs: “There are no shortcuts to economic growth. It will take long-term decisions. It will take hard yards. It will take time for the reforms we are introducing to be felt in the every day economy.

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Rachel Reeves has confirmed that the OBR has downgraded the UK’s economic growth forecast for this year from 2% to 1%.

“It is right that the Office for Budget Responsibility consider the evidence and look carefully at measures before recognising a growth impact in their forecast.”

The chancellor pointed to changes to the National Planning Policy Framework, saying mandatory housing targets and bringing “grey belt” land into scope for development will “permanently increase the level of real GDP by 0.2% by 2029-30”.

This will bring an “additional £6.8bn in our economy and by 0.4% of GDP within the next 10 years”, she said.

Ms Reeves also highlighted reforms to the pension system and a national wealth fund, adding it was part of a “serious plan” for economic growth.

Also announced in the spring statement today:

  • The budget will move from a deficit of £36.1bn in 2025/26 and £13.4bn in 2026/27, to a surplus of £6bn in 2027/28, £7.1bn in 2028/29 and £9.9bn in 2029/30;
  • The Office for Budget Responsibility estimates Labour’s cuts to the welfare budget will save £4.8bn, with changes going further than initially thought;
  • Reeves says the health element of universal credit will be cut by half and frozen for new claimants;
  • There are no more tax rises today, but the chancellor claims she’ll raise an extra billion pounds by cracking down more on tax evasion;
  • Day-to-day spending will be protected, other than the aid budget, with spending increasing above inflation every year;
  • The defence budget will get a £2.2bn boost for next year, paving the way for spending eventually hitting 2.5% of GDP;
  • House building will hit a 40-year-high thanks to Labour’s planning reforms.

The chancellor confirmed that a voluntary redundancy scheme is set to launch for civil servants as part of her mission to “make government leaner”. She said this will deliver £3.5bn in “day-to-day savings by 2029-30”.

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Sky’s Economics and Data Editor Ed Conway goes through the latest economic data following the chancellor’s spring statement.

Shortly afterwards, Conservative leader Kemi Badenoch accused Labour of financial “chaos”.

She said the spring statement was “all smoke and mirrors”, adding: “I remember the last budget when Rachel Reeves said she was smashing glass ceilings, now it feels like the roof is falling over all our heads.”

A handful of Labour MPs were unimpressed with the moves around welfare, with Debbie Abrahams – the MP for Oldham East and Saddleworth – claiming “all the evidence points to cuts in welfare leading to severe poverty and worsened health conditions”.

An impact assessment into Labour’s welfare reforms, which include narrowing the eligibility criteria for personal independence payments (PIP), found there could be an additional 250,000 people in “relative poverty” by 2030 due to the changes.

Richard Burgon, the Labour MP for Leeds East, said “taking away the personal independence payments” from disabled people is an “especially cruel choice”.

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Cole Cooper death: Grieving mum alleges ‘third party’ involved

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Cole Cooper death: Grieving mum alleges 'third party' involved

The grieving mother of a Scottish teenager who vanished for almost five weeks has told Sky News she believes a “third party” was involved in her son’s death – but police say there’s “no evidence” of that.

Cole Cooper, 19, was discovered dead in woods near Falkirk earlier this month following a missing persons inquiry his relatives don’t believe was taken seriously enough by police.

He was last seen on CCTV in May after leaving a house party, but police later revealed a former school friend had spoken to Cole a few days later nearby.

Speaking exclusively to Sky News, his mother Wendy Stewart, 42, revealed her son had “various arguments” in the days and hours before he disappeared.

Wendy&Aimee
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Cole’s mum Wendy (L) and his aunt Aimee

In an emotional interview, she said: “He was only 19, he should never have been taken. I am never going to see him again. I never got a chance to give him a last cuddle and hold his hand.

“Someone has taken that away from me far too soon. Whether it be intentionally or unintentionally, I do believe there has been some involvement by a third party and the result is the death of Cole.”

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The family, who organised a local vigil in Cole’s memory last weekend, have vowed to get “justice”.

Asked what that means, Ms Stewart told Sky News: “Finding the culprit and getting justice that way. Finding the person that is responsible for the death of my child.”

Police previously said 400 residents were spoken to during door-to-door enquiries and more than 2,000 hours of CCTV footage was collected.

The 19-year-old’s death is being treated as “unexplained”, with a top police officer saying “at this time there is no evidence of any third party involvement”.

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Cole Cooper's mother Wendy Stewart, comforts her son Coby, 10 and daughter Casia, 11, during a vigil at the Glenskirlie Hotel in Banknock, f
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A vigil was held in Banknock for Cole Cooper. Pic: PA

Cole’s aunt Aimee Tennie, 32, revealed the family’s anger over the police handling of the case as they attempt to find out what happened.

She said: “We are aware of small details surrounding the weekend leading up to it with arguments. He had a few arguments over that weekend. We want the details re-examined thoroughly.”

Sky News put all of the family’s concerns and allegations to Police Scotland.

The force initially swerved our questions and responded saying: “Enquiries remain ongoing.”

In an update later on Wednesday morning, Detective Chief Inspector Bob Williamson said: “We are carrying out significant enquiries into Cole’s death, however, at this time there is no evidence of any third party involvement.

“It is vital that we establish the full circumstances leading up to Cole’s death so that we can provide some answers to his family.

“The thoughts of everyone involved in this investigation are very much with his family and friends and officers will continue to offer them support and keep them informed as our enquiries progress.”

Ms Stewart claimed the probe has been handled “shockingly” with a failure to take her son’s disappearance seriously.

The 42-year-old said: “I have had to scream and shout from rooftops to be heard by the police. I don’t think they have handled it well.

“The police really need to take accountability and listen to families, they are reporting a missing child and understand the family knows their child best.”

Cole’s loved ones still have not been told when his body will be released to allow them to lay him to rest.

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Sisters drowned in pools in Eryri (Snowdonia) National Park, inquest told

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Sisters drowned in pools in Eryri (Snowdonia) National Park, inquest told

Two sisters drowned in pools in Wales’s largest national park, an inquest has heard.

Hajra Zahid, 29, and Haleema Zahid, 25, were pulled from pools on the Watkin Path – one of the six main routes to the summit of Yr Wyddfa, or Snowdon, in North Wales on 11 June.

North Wales Police said officers were called to the scene in Eryri National Park, also known as Snowdonia, at 9.31pm after they received a report that a woman had been pulled from the water, and another was said to be in the pools.

Both sisters, who were born in Pakistan but lived in Maltsby, Rotherham, South Yorkshire, were pronounced dead at the scene before 11pm.

Inquests into their deaths were opened at the Dafydd Orwig Chamber in Caernarfon on Wednesday, and assistant coroner for north-west Wales, Sarah Riley, said they “sadly both died as a result of drowning”.

“Investigations continue in terms of how they came by their death and the inquest is therefore adjourned to allow for completion of those investigations,” she added, as she offered her condolences to the sisters’ family and friends.

The coroner said the siblings “had travelled to the Nant Gwynant area with friends from university”, with a friend later identifying the University of Chester students.

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Vice-chancellor of the University of Chester, Professor Eunice Simmons, said: “The University of Chester community is in mourning for the tragic loss of Haleema Zahid and Hajra Zahid and our heartfelt sympathies are with their families and friends during this incredibly difficult time.

“Haleema and Hajra had joined Chester Business School earlier this year on the Master’s in International Business course.

“They touched the lives of many here at Chester – their friends, the cohort on their course and the staff who taught them – and they will be deeply missed.”

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Kneecap rapper appears in court on terror charge – as protesters gather outside

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Kneecap rapper appears in court on terror charge - as protesters gather outside

A member of Irish-language rap group Kneecap has appeared in court in London after being charged with a terror offence – as hundreds of protesters gathered outside.

Liam O’Hanna, or Liam Og O hAnnaidh, is accused of displaying a flag in support of Hezbollah, a proscribed organisation in the UK, at a gig last year.

The charge against the 27-year-old, from Belfast, was brought last month after counter-terror officers assessed a video reported to be from a Kneecap concert at the O2 Forum in Kentish Town, London, on 21 November 2024.

O hAnnaidh arrived at Westminster Magistrates’ Court on Wednesday with bandmates Naoise O Caireallain and JJ O Dochartaigh, as a crowd of fans and supporters gathered with placards and flags outside.

Kneecap's Liam O'Hanna walks into court.
Pic PA
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O’Hanna (centre) arrived at court with his bandmates, including Naoise O Caireallain (below). Pics: PA

Kneecap's Moglai Bap (Naoise O Caireallain).
Pic PA

During a short appearance, O hAnnaidh confirmed his name and address, and was released on unconditional bail until his next hearing on 20 August.

Chief Magistrate Paul Goldspring told him he must attend court on that day.

Kneecap released their first single in 2017 and rose to wider prominence in 2024 following the release of their debut album and award-winning eponymous film – a fictionalised retelling of how the band came together and their fight to save the Irish language.

The group are known for their provocative lyrics and merchandise – and have been vocally opposed to Israel’s military action in Gaza.

O hAnnaidh performs under the stage name Mo Chara, while O Caireallain is known as Moglai Bap, and O Dochartaigh as DJ Provai.

Kneecap's Liam Og O Hannaidh leaves Westminster Magistrates' Court in London, through a crowd of supporters after he appeared charged with a terrorism offence. The 27-year-old from Belfast, who performs under the stage name Mo Chara and is also known as Liam O'Hanna, has been charged with a terrorism offence relating to displaying a flag in support of Hezbollah at a gig at the O2 Forum in Kentish Town on November 21. Picture date: Wednesday June 18, 2025. PA Photo. Photo credit should read: Jordan Pettitt/PA Wire
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Pic: PA

They have built a following for their hedonistic anti-establishment tracks, but their outspoken stance has proved polarising – prompting a surge in streaming for their songs and, at the same time, resulting in several of their gigs being cancelled this year.

Last year, they won a discrimination case against the UK government after Conservative leader Kemi Badenoch tried to refuse them a £14,250 funding award when she was business secretary.

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