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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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Government’s defence spending increase ‘more spin than substance’, insiders tell Sky News

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Government's defence spending increase 'more spin than substance', insiders tell Sky News

The government has been accused of “spin and tinkering” over an announcement about an increase in defence spending which falls far short of what is needed, Sky News understands.

An entire fleet of military helicopters – the Royal Air Force’s Puma aircraft – was retired this week as part of a cost-saving plan to scrap older kit that was announced in November.

The sight of old but still airworthy helicopters being taken out of service before a replacement is ready – creating a capability gap – contrasts with statements by Rachel Reeves, the chancellor, and John Healey, the defence secretary, about boosting the defence budget.

The Puma aircraft's last flight. Pic: UK MOD
Image:
The Puma aircraft’s last flight. Pic: UK MOD

Sir Ben Wallace, the longest-serving Conservative defence secretary, said he had expected better given the urgent need to rearm at a time of heightened threats and following Donald Trump’s warnings to Europe to stop relying on the United States to bankroll its security.

“We are at the dawn of a new era of insecurity across the world,” Sir Ben said.

“The US has warned us for a decade about not taking them for granted, and we all did nothing. In Germany, Poland, and France the penny has dropped and they have embraced a necessary culture change and re-prioritisation of government spend.

“In the UK, the government still thinks it is about spin and tinkering. It fools no one, and we risk losing our credibility and leadership on defence amongst allies.”

Sir Ben Wallace. Pic: Reuters
Image:
Sir Ben Wallace. Pic: Reuters

In her spring statement on Wednesday, the chancellor announced an extra £2.2bn for defence this coming financial year.

Ms Reeves told MPs it was a further “down payment” on a promise by the prime minister to lift expenditure on defence to 2.5% of GDP from April 2027. Defence spending is currently around 2.3% of gross national income. The new money will help inch it up to 2.36%.

The chancellor, defence secretary and prime minister have repeatedly phrased their plan to inject cash into the armed forces over this parliament as “the biggest sustained increase in defence spending since the end of the Cold War”.

But defence insiders say, while any new money is welcome, this claim is more spin than substance because the defence budget largely suffered repeated cuts since the Soviet Union collapsed.

Chancellor Rachel Reeves. Pic: PA
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Chancellor Rachel Reeves announced an additional £2.2bn in defence spending in her spring statement. Pic: PA

Also, focusing on a slogan does not answer the question of whether an extra £2bn over the next 12 months is enough to transform the British Army, Royal Navy and Royal Air Force at the speed that is necessary, they said.

Asked whether it was sufficient, multiple military sources and a defence industry source collectively said “no”.

“This is just another sticking plaster that overlooks decades of underinvestment and chronic financial mismanagement of our armed forces,” the defence industry source said.

“Increasing spending or a focus on ‘novel technologies’ ignores the fact that we have let a broken system flourish.

“Time and time again, we see celebration over procuring outdated solutions while their manufacturers get away with significant delays or overspends with seemingly few repercussions.

“While we continue to spin and fight over tiny percentages of spending, we are allowing our armed forces to get hollowed out in front of us, hoping that government soundbites will provide the deterrence that our current equipment can’t.”

Defence Secretary John Healey on a nuclear submarine on 17 March . Pic: Crown copyright 2025
Image:
Defence Secretary John Healey on a nuclear submarine on 17 March. Pic: Crown copyright 2025

A military source said the additional £2.2bn for the year to March 2026 was a step in the right direction, but said it would merely keep defence on “life support”.

The situation only starts to improve marginally in two years’ time when the defence budget is finally forecast to hit 2.5% of GDP, the source said.

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This is despite the UK being a leading member of the “coalition of the willing”, with Sir Keir Starmer pledging to deploy forces to secure any ceasefire deal in Ukraine – a move that would put huge additional strain on his already stretched armed forces.

PM Sir Keir Starmer and Defence Secretary John Healey on a nuclear submarine. Pic: Crown Copyright 2025
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PM Sir Keir Starmer and Defence Secretary John Healey on a nuclear submarine. Pic: Crown Copyright 2025

While the UK talks about 2.5% for the defence budget, Mark Rutte, the secretary general of NATO, says allies must spend more than 3%, while Mr Trump wants them to aim for 5%.

In 2020, Boris Johnson, as the prime minister, said a plan to increase the defence budget by £16bn over four years, on top of a commitment to lift defence spending by 0.5% above inflation for each year of the parliament – so what was described at the time as an additional £24bn in total – was the biggest boost to defence expenditure since the Cold War.

Sir Keir has added the word “sustained” when describing the size of his defence spending boost – though that will depend upon the accuracy of forecasts that GDP will expand at the rate predicted in the coming years.

Sir Ben said: “The UK is facing some of the highest threats in a generation, yet John Healey thinks spin is the appropriate response. He fools no one – not the men and women of the armed forces and not our enemies. I had expected better of him.”

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‘Experiencing the solar system for yourself’: Sun obscured over the UK in partial solar eclipse

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'Experiencing the solar system for yourself': Sun obscured over the UK in partial solar eclipse

UK stargazers were treated to a partial solar eclipse on Saturday morning, a phenomenon that sees the sun partially obscured by the moon.

Up to 40% of the sun was covered as the moon passed between the sun and Earth, partly obscuring the star.

Members of the public gathered to watch the spectacle in Greenwich while thousands more followed online.

Science correspondent Thomas Moore wearing solar eclipse viewing glasses in Greenwich
Image:
Science correspondent Thomas Moore wearing solar eclipse viewing glasses in Greenwich

Saturday's partial solar eclipse. Pic: Royal Observatory Greenwich
Image:
Saturday’s partial solar eclipse at around 10.30am. Pic: Royal Observatory Greenwich

“It’s a different way of experiencing the mechanics of the solar system for yourself,” said Catherine Muller, an astronomer at Royal Observatory to Sky News science correspondent Thomas Moore.

“We know about it theoretically, we know that the moon orbits the Earth and they might pass by us but really getting to see it in a new and different way is quite exciting for a lot of people.”

Hobby astronomers watch the partial eclipse in Germany. Pic: AP
Image:
Hobby astronomers watch the partial eclipse in Germany. Pic: AP

A solar telescope that projects a magnified image of the sun onto a piece of paper
Image:
A solar telescope that projects a magnified image of the sun on to a piece of paper

Looking directly at the sun is dangerous so astronomers used glasses, solar telescopes and pinhole cameras to watch the event.

The beginning of the partial eclipse above the roof of Berlin's Olympic Stadium. Pic: Reuters
Image:
The beginning of the partial eclipse above the roof of Berlin’s Olympic Stadium. Pic: Reuters

The eclipse was visible across several other parts of the world, including western Europe, Greenland, north-west Africa and north-east North America.

More on Eclipse

For people in the southeast of England – where the weather meant the UK views were best – the peak of the eclipse was at around 11.03am.

At that point, around 30-40% of the sun was obscured, according to the Royal Observatory.

Eclipse chasers in awe as moon takes a nibble from the sun

Most of us are normally unaware of the mechanics of the solar system.

But when the silhouette of the moon slides across the disc of the sun during an eclipse you get to marvel at the precision movement of celestial objects.

At the Royal Observatory in Greenwich, home of the meridian, the partial eclipse started at 10.07, with the moon appearing to take nibble from the edge of the sun.

Crowds watched through eclipse glasses, awed by the best show from Earth.

Wispy cloud had drifted across the sun by the time the eclipse peaked an hour later. But not enough to spoil the view.

Read the full story here

Northwest Scotland had the most coverage of the sun with 47.9% in Gallan Head, with Manchester getting 36.1% of coverage.

Dover had the least coverage of the sun with only 28.1%.

The next total solar eclipse is not for another 65 years in 2090, so Ms Muller recommends “making the most of the partial ones when they’re around”.

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How to see today’s partial solar eclipse from the UK

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How to see today's partial solar eclipse from the UK

Stargazers could catch a glimpse of a partial solar eclipse this morning, where the sun looks like it’s had a bite taken out of it.

It only occurs a handful of times a year, when the moon passes between the sun and Earth, and partly obscures the star.

Here’s what you need to know for the best chance of seeing it.

When is it?

It’s expected to be visible in the UK from 9.56am to 12.14pm today.

For people in the south of England – where the weather means views should be best – the peak of the eclipse is set to be at around 11.03am.

This is when the eclipse reaches its “maximum” – the moment when the greatest portion of the sun is hidden.

According to the Royal Observatory, the maximum this time will see around 30-40% of the sun obscured.

What is the weather meant to be like?

Some parts of the UK will see more of the eclipse than others. Northwest Scotland is expected to see the most coverage with 47.9% in Gallan Head.

Dover in southwest England is set to see the least coverage of the eclipse with only 28.1% of the sun blocked by the moon, while Manchester is expected to have 36.1% of coverage.

Check the forecast where you are

Met Office meteorologist Alex Burkill said: “The further northwest you are in the UK the more of an eclipse you are likely to have, whereas towards the southeast it’s a little bit less – but still 30%, and still a large chunk taken out of the sun.”

Met Office maps show clear skies across southeast England at the time that the eclipse starts, with partial cloud above Manchester and northwest England, and cloud above most of Scotland.

The areas expected to have some of the best eclipse coverage are also likely to see cloud and rain at the time.

Conditions are widely meant to clear over the weekend, with temperatures up to 17C in the South East and 14C in the North on Sunday – but it may come slightly too late to have a good view of the sun today.

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How can I give myself the best chance of seeing it?

Even though part of the sun will be covered, its brightness will still be dangerous to the naked eye, so experts say it can cause serious and permanent damage if you look straight at it without appropriate protection.

Also: standard sunglasses do not count as protection.

If you want more than a quick glance, you can use a pinhole projector or solar eclipse viewing glasses.

You can make pinhole projectors at home, simply by making a hole in a piece of card, holding the card up to the sun and holding another piece of paper behind the card.

The shape of the sun will appear projected onto the paper, without harming you.

Solar eclipse viewing glasses can be purchased online.

For those who can’t see it in person, the Royal Observatory is streaming the partial eclipse live through one of its modern telescopes on its YouTube channel, with coverage starting from 10am.

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